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 ensures us to get the reinvestment return from the cash flow on the WACC without worrying about the scale problem. I find that developing the new technologies in the house has higher MIRR than purchasing; the two rates are 17.40% and 15.40% respectively. 2. NPV, the sum of the present value of the cash outflows and inflows can measure the expected change in wealth from undertaking the project. The NPV for purchasing the technologies is 94.71 million and the NPV for developing the technologies is 127.24 million.
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. Moreover, they can use its manufacturing nearly full capacity. Execution: Tork’s low-end sales where demand was highly seasonal al, meaning production is increasing in late winter and early spring. Thus, LG can gain more advantage based on their sales tend to be smoother throughout the year. 2.
Production plan for Riordan Manufacturing University of Phoenix Operations Management OPS 571 Theodore Curry August 01, 2012 Production plan for Riordan Manufacturing Development of a production plan involves both strategic capacity planning and lean production to create an optimally efficient and cost-effective process design and supply management chain. Riordan Manufacturing’s existing capacity plan is sufficient to sustain the firm’s current production design and output levels, but for Riordan to enhance its competitiveness in an evolving industry the company must constantly reevaluate its processes. The application of strategic capacity planning and lean production techniques can facilitate Riordan’s attainment of its optimal
A few of the most significant advantages of outsourcing include: Cheaper Labor Possibly the most well known reason to consider outsourcing is to access cheaper labor. Workers in developing countries are paid far less than workers in developing countries due to the lower cost of living. Often these workers are not unionized as well, which further helps with cost cutting. Cut Operating Costs Even though your outsourced work must be paid for, often the costs are cheaper than if your company performed the operation itself. Lower salaries are a part of this benefit, but it goes much deeper.
Let’s explore these reasons individually. The first reason is its far cheaper to go to SWCC than a regular university. SWCC is a great place to start out because the tuition is so much cheaper than it is at a university. At the public universities I've looked at, you can expect to pay around four thousand two hundred dollars per semester, while at SWCC you will pay around thousand
4. Is ECCO following the inside-out or outside-in strategic perspective? What are the implications of this choice and how can ECCO increase their sales/marketing efforts? * Inside-out strategy: which is an internal oriented strategy. This strategy emphasizes the company’s ability to utilize its existing internal resources and focuses on streamlining operation through proper sizing and cost reduction.
While Country B has the absolute advantage in production of steel because Country B can produce more steel with one unit of resource. While Comparative advantage is the ability of a firm or individual to produce goods and services at a lower opportunity cost than other firms or individuals. A comparative advantage gives a company the ability to sell goods and services at a lower price than its competitors and realize stronger sales margins. For example, with one unit of resource, Country A can produce 320units of textiles and 40units of steels. While Country B produce 80 units of textiles and 20 units of steels.
When comparing these aspects from foreign countries to aspects of the United States, one side is clearly more preferable. If one is looking for a prevailing quality of life, the United States is the inferior one choice when compared to other nations. When evaluating quality of life it is difficult to clearly have set criteria to base it off of. If evaluating quality of life, wealth of the nation does not overshadow other aspects for this concept. For example, “The main reason the United States if richer is because...they work about 20% more hours per year than Europeans (newfederalist).” Based off of this study, we see that while Americans are wealthier, they are working a lot more strenuously to make this money.
Recommendations and suggestions for Medtronic on the level of involvement the company should take to increase the likelihood of long term success are included in the conclusion. Table of Contents 1 Why invest outside of the U.S? 3 1.1 What are emerging markets? 3 1.2 Porter’s four determinants 3 1.2.1 Factor Conditions 4 1.2.2 Demand conditions 4 1.2.3 Related and supporting Industries 5 1.2.4 Strategy, structure and rivalry 5 1.3 FSAs/CSAs 5 2 International Business Environments 7 2.1 Political environment overview and management 7 2.2