Economies of scale can be enjoyed by any size firm expanding its scale of operation. It is important to companies such as McDonald’s and GBK because firstly, a large business can pass on lower costs to customers through lower prices and increase its share of a market. Secondly, a business could choose to maintain its current price for its product and accept higher profit margins. 3. a) What are marketing economies of scale? As a firm grows the average cost of advertising per unit will fall, leading to lower average costs.
This will improve the trading process for not only the company, but also the rest of the country. The benefits of a better transport infrastructure in our countries include improved capacity and better connectivity between cities and nations which helps to boost trade, and create growth and
It will benefit from cheaper transportation costs from their warehouse. These benefits are greater than drawbacks which include higher salary costs,
The differences over cost driver between LG and TORK are mainly come from the followings, please see below: Design: LG uses the plastic parts which the weight is lesser than Tork steel’s part and also the cost are cheaper. Moreover, the assembled times of LG are faster than Tork along with the wages rate of LG are lower. In conclusion, LG are cheaper and faster than Tork Geography: The freight costs of LG are significantly higher due to requiring ocean freight and shipping to distribution centers, whereas Tork relies on trucks and trains. However, LG enjoys a large wage advantage in Korea. Facility: LG has higher manufacturing volume based on they has an advantage from scale of economies by purchasing lots of material and got the discount on the prices.
If this is the case then McDonalds will be able to grow and will be able to expand their business. They will have higher sales revenue. Sales revenue means the income that a company receives from its normal business activities, usually from the sale of goods and services to customers. They will also have more opportunities to invest in new projects and it is easier to control costs. This could be the opposite and McDonalds will then have low availability and high cost.
A growth company tends to have very profitable reinvestment opportunities for its own retained earnings. Economic growth will affect Etisalat as it would increase their profits due to more people wanting more products and wanting to spend their money. As people have more money to spend on luxuries instead of the essentials it means that the higher value products will be brought. For example the Andrex toilet rolls will be brought instead of Etisalat value, because of this it means more money is being spent in the store which is an advantage for Etisalat. Recession occurs when people involved in business become more cautious and: * Customers cut back on spending, and start to save more * Manufactures and sellers cut back on their orders, produce fewer goods and start to cut back costs in general, including by laying off workers.
Benefits There are many advantages for individual buying though from GPOs, one of the major advantages is the ability to provide a lower cost solution. By leveraging the buying power of members of GPOs, the consortium is able to combine the amount of products to gain these critical discounts, which in turn provides the best price to each individual participant. Vendors are willing to extend discounts and additional service levels to the GPOs to gain access to their large networks of buyers. This allows vendors to reduce their sales cycle and have a good forward view into demand - greatly impacting successful production and supply chain management. Other benefits for buying from GPOs may include as following: • Comprehensive sourcing strategies • In-house contracting/clinical expertise • Advanced procurement
When consumers have a positive outlook on the economy they are more likely to purchase more products from staple stores. 1.1 Economic Factors The consumer staple from a macroeconomic standpoint is a very stable sector because it provides consumers with the basic necessities that people have made a part of their lives. This includes food, tobacco, drug retail, food distributors, food retail, brewers, distillers and vintners, household products, personal products, soft drinks, and agricultural products. The best time to buy a consumer staple is at the peak of a recovery. Staples perform well during recessions because
“Technology is a great enabler.” Technology is there to improve efficiency, therefore allowing more time and effort to go into productive, customer-facing issues. It thus improves sales by allowing the change of prices quickly, information disseminates quicker and sorts out historical data for analysis. Another important issue is the managing of key issues such as tobacco and alcohol restrictions. While it is a staple in profit generating for convenient retailing stores, research has to be done to evaluate the impact of restrictions and mitigate losses. Regulations are inevitable in the future and preparations will ensure a competitive advantage.
Certainly, there are some positive effects of China’s rising wages in its prosperous domestic market and other countries’ revival employment. One advantage is that foreign investment manufacturers will save a lot of freight shipping cost to the international market since many present or potential