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.

B. Use fixed cost ICDs with more customers

By using fixed cost ICDs with more customer volume, the unit cost of the ICD declines as a component of the final Output cost.

Use fixed cost ICDs with competitors who employ outsourcing. Sell ICDs in major cost functions of the company:
Sell Create ICDs

No.	Industry SIC	Year	Notes
1	1381	2004	Weatherford drilling services firm is one driven by emerging technologies. For example, its technology for expandable-pipes that allow wells to be wider at greater depths-is improving. Weatherford recently created a deal to market the devices with larger rival Schlumberger.
2	2834	2001	In order to hold off Barr on Prozac, Lilly pursued a number of “franchise extension strategies”. It forms a joint venture with a company developing a pill that would have fewer side effects, but still use the Prozac ingredients.
3	2834	2002	King quadrupled the number of sales reps promoting Alstace to 600 and partnered with Wyeth for better marketing.
4	2834	2004	Generic drug companies are split over the issue of authorized generics. As the drug patents expired and earnings growth slowed, the brand name pharmas tried merging with rivals to extend patents, but earnings did not increase as expected. In another effort, the pharmas are licensing their drugs to generic companies. The authorized generic companies then sell the brand-name drugs at generic prices and then split the profits with the pharma company. Since the drug is basically the same as the brand-name under a generic title, it is already FDA approved and can be sold right away, even circumventing the 1984 Hatch-Waxman law that states the first generic drug firm to file its generic copy with the FDA gets 180 days of marketing exclusivity.
5	2834	2006	After a heart drug debacle, Pfizer Inc. is reassessing the way it bets on unproven technology. It’s going to overhaul the process of licensing and co-developing products invented by other drug companies. For starters, it’s going to shatter the barriers that have prevented several proud Pfizer units from functioning as a team, unclogging the communication lines and allowing executives to spot and nix problems early on. Pfizer is also going to closely monitor what Pfizer’s competitors, large and small, are doing in the same treatment areas. It will broaden the definition of collaboration beyond mergers and licensing to include co-promotion deals, equity investments, and other options.
6	2834	2006	Pfizer Inc. is planning to introduce a heavily discounted generic version of the antidepressant Zoloft after the brand-name drug loses domestic patent protection. Typically, when the patent for a branded drug is ruled invalid or expires, its maker continues to offer it to those patients who can afford to disdain generics; but at the same time, the brand-name company licenses the newly nonpatented but identical formula to selected generic-drug manufacturers, with whom it splits the revenue. The practice, producing drugs known as authorized generics, preserves sales for the original maker but also keeps any generic-drug maker from successfully challenging the brand-name drug makers’ drugs.
7	2836	1993	Embrex licensed Elf Sanofi to manufacture and market a vaccine for chickens – it’s trying to increase revenue without adding to its work force.
8	3312	1994	USX will join with Nucor to develop a cheaper, more environmentally friendly method of producing steel.
9	3572	1997	Quantum plans to license manufacturing rights to another vendor or two, probably when it upgrades its DLT 7000 line from the 35GB capacity level to 70GB.
10	3661	2001	Under the pressure of the wireless handset market, Motorola has announced that it will sell the innards of its cell phones to other companies. Motorola is hoping to turn a profit by selling its software and chips to companies. Under the new program, Motorola hopes to reach 100% of the handset customer base.
11	6211	1999	iNautix sold software through Pershing correspondents to many of DLJ direct online brokerage competitors.

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