Economies of scale - Holden plc
- Created by: sam124
- Created on: 28-03-15 12:05
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- Economies of scale
- Purchasing
- Buying an order in bulk. Reducing the cost per unit.
- Holden may benefit when ordering materials to manufacture, such as fabric.
- Buying an order in bulk. Reducing the cost per unit.
- Technical
- When a firm has access to the latest tech. Allowing them to produce more goods in the same time period.
- Reducing the cost per unit
- When a firm has access to the latest tech. Allowing them to produce more goods in the same time period.
- Risk- bearing
- When a firm sells a range of products. They spread the risk of failure of several products.
- Holden: if the demand for bean bags drops, they still have cushions to sell.
- When a firm sells a range of products. They spread the risk of failure of several products.
- Marketing
- Access to mass media when advertising. Their message reaches more customers, reducing the cost of advertising per customer
- Holden are unlikely to benifit!
- Case study tells us that they use advertise via a website and exhibitions.
- Holden are unlikely to benifit!
- Access to mass media when advertising. Their message reaches more customers, reducing the cost of advertising per customer
- Financial
- Discountd interest rates for large firms. Reducing the cost of interest per pound borrowed.
- Holden can benefit if they move back to Bowton.
- They might decide to borrow money for a mortgage or loan, so they can get lower interest rates.
- Holden can benefit if they move back to Bowton.
- Discountd interest rates for large firms. Reducing the cost of interest per pound borrowed.
- Purchasing
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