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Economies of scale are the cost
advantages that a business can exploit
by expanding their scale of
production. The effect of economies
of scale is to reduce the average (unit)
costs of production.…read more

Slide 3

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A large firm can spread its advertising
and marketing budget over a large
output and it can purchase its inputs in
bulk at negotiated discounted prices if it
has sufficient negotiation power in the
market…read more

Slide 4

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the difference between the sale price and
the production cost of a product is the
value added per unit
· value added refers to "extra" feature(s) of
an item of interest (product, service,
person etc.) that go beyond the standard
expectations and provide something "more"
while adding little or nothing to its cost
· Value-added features give competitive
edges to companies with otherwise more
expensive products…read more

Slide 5

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How authority is delegated in a business
Centralised ­ management have all the
authority
Decentralised ­ subordinates make all
the decisions
These 2 extremes rarely occur but
elements are apparent in each business…read more

Slide 6

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Senior management in control of
business (budgets etc.)
Procedures can be standardised
throughout the business (economies of
scale)
Senior managers more
experienced/skillful in decision making
Communication can improve if there are
fewer decision makers…read more

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