Economies of Scale
- Created by: athena paterson
- Created on: 08-06-13 17:28
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- Economies of Scale
- Marketing
- Large companies can afford to spend a lot on advertising.
- the total cost for the advent is spread across a large number of stores/ products.
- Techincal
- large companies can afford new machinery.
- produces more units at a faster pace.
- improves quality
- Financial
- Able to borrow money easier as there is less risk to the financial organisation
- Less risk means that banks charge lower rates of interest.
- Less risk means that banks charge lower rates of interest.
- Able to borrow money easier as there is less risk to the financial organisation
- Specialisation
- large firms can afford to pay for specialists in every functional area.
- Research and Development
- large companies can spend more on research and development
- they can also afford specialists in design and innovation
- Social and Welfare
- large companies can afford to other benefits to the employees.
- Consequently they are able to gain higher quality staff who are less likely to take work off unnecessarily.
- Purchasing
- large companies can afford to buy in bulk.
- thye have the space to store it.
- thye have the space to store it.
- the turnoverr of stock is large enough to avoid damage, wastage and obsoletion.
- large companies can afford to buy in bulk.
- Marketing
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