Increase the Output Over Which a Fixed Cost ICD is Used
This action reduces the quantity of a unique fixed cost ICD used to produce a unit of Output by increasing the units of Output. For example, a new product design, or a new process patent, are both ICDs that have virtually limitless capacity for use. These are fixed cost ICDs. You pay for them once and you can use them over a virtually unlimited amount of Output. Their ICD/O ratios are limited only by the current demand level for Output.
A.
Acquire similar organization to spread fixed cost ICDs
The acquisition of another organization with a similar business enables the company to take certain fixed cost ICDs in the form of processes and designs and use them over a larger amount of Output.
Buy company in same market: For segment (e.g. geographic) expansion at low cost:
New geography inside country
No. | Industry SIC | Year | Notes |
1 | 1521 | 1994 | Horton, the homebuilder, recently acquired Joe Miller Homes of Minnesota; cheaper than buying raw acreage and developing its own local organization. "Buying a good builder gives you a 3-yr jump over starting from scratch." |
2 | 2711 | 2001 | High margins are partly a bounty for helping trailblaze the practice of buying community papers in geographic bunches to lure ad dollars from metro dailies and trim expenses through staff consolidation. |
3 | 3271 | 2004 | Florida Rock has gotten further boosts from last year's $122 million acquisition of two cement import terminals from Lafarge North America. There is a finite amount of rock, and for environmental and other reasons, it is enormously difficult to really create a terminal for processing cement. The property they bought from Lafarge is irreplaceable. |
4 | 3669 | 1991 | Alert Holdings bought many little monitoring companies. To buy other companies, Alert created limited partnerships. |
5 | 4011 | 1996 | Union Pacific has proposed a takeover of Southern Pacific. |
6 | 4812 | 2001 | Alltel has offered to buy CenturyTel for $5.9 billion. If the deal goes through, it would create a rural phone empire with a 2001 revenue of $10 billion and an operating cash flow of $3.9 billion. It would have 12 million customers across the country. |
7 | 4813 | 1996 | Davel bought ComTel Corp's long distance service, gaining an inroad into the hospitality industry in 43 states. |
8 | 4832 | 1997 | Jacor's recent expansion into the smaller-ranked markets is consistent with its satellite market strategy of leveraging existing resources from its major markets into nearby territories at little incremental cost. |
9 | 4841 | 1997 | By assembling broad continuous groups of subscribers, cable operators can deliver new services at a lower cost because of marketing and operating efficiencies (ex: Cablevision Systems is buying TCI Systems serving subscribers in markets that mesh perfectly with the company's cable systems in the N.Y. area.) |
10 | 4924 | 1996 | Xplor focuses on developing newly acquired oil properties in S IL, additional acquisitions near core properties in IL & WV. |
11 | 4953 | 1996 | United Waste has made 98 acquisitions since 1989. It makes as many acquisitions in one fragmented market as possible. Then it consolidates those operations and cuts out duplicate expenses. |
12 | 5044 | 1997 | IKON recently purchased 6 suppliers of office equipment in Georgia, giving it a total of 35 locations in the state. In the 4th quarter of 1996 alone, IKON bought 29 smaller dealers nationwide. For the year, it purchased 100 companies. |
13 | 6022 | 2001 | First Fed Bank of CA does buy individual locations from other banks but it does not plan to have a big merger. |
14 | 6036 | 2003 | Washington Mutual is highly successful in its acquisitions. It doesn't overpay and it quickly integrates technology. It picks acquisition targets that will make them a market leader and opens branches in dense urban areas that have high customer-dissatisfaction. |
15 | 8011 | 1997 | Primary drivers of growth for this segment are acquisitions of additional ophthalmology practices in existing and new markets |
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