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Terminal Cost—Understanding the Evolutionary Logic of Business

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  • Shuai Li

    (University of Oulu)

Abstract

This chapter introduces the “end-state cost” framework to analyze business evolution. Traditional physical products have variable costs growing linearly O(n); digital products and shared infrastructure approximate constant cost O(1); platform economies compound O(1) with spatial replication and network effects, enabling exponential growth. This perspective allows companies to transcend linear thinking, identify marginal cost limits, and select optimal markets for sustained advantage.

Suggested Citation

  • Shuai Li, 2026. "Terminal Cost—Understanding the Evolutionary Logic of Business," Innovation, Technology, and Knowledge Management,, Springer.
  • Handle: RePEc:spr:innchp:978-3-032-22652-5_26
    DOI: 10.1007/978-3-032-22652-5_26
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