Internal Economies of Scale Mindmap

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  • Internal Economies of Scale
    • Administrative
      • Communication systems can be improved through new technology
      • They are able to employ specialist staff and introduce coordinated adminstrative systems
    • Financial
      • Large firms will find it easier to obtain finance as they are seen more secure by lenders
      • Interest rates will be lower as they present a lower risk to providers of capital
    • Technical
      • Modern equipment can be installed which will improve efficiency
      • Highly trained technicians can be employed in other to improve the reliability of the production process
    • Marketing
      • Employ mass marketing strategies such as TV Advertising
      • Investment in marketing research, to minimise the risks involved
    • Risk-bearing
      • Large firms can diversify through takeovers into other business areas in order to reduce risks
      • Large firms can afford to take greater risks in new product development


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