Other stuff

Question 1

What is the economy of scale?

definition, 6 types

Answer 1

-Economies of scale are cost advantages companies experience when production becomes efficient, as costs can be spread over a larger amount of goods
-when the company gets big -> it can negotiate down the costs
-Technical
-Managerial
-Financial/Purchasing
-Marketing
-Consumers
-Employees

Question 2

What is the diseconomy of scale?

definition, 5 types

Answer 2

-Diseconomies of scale happen when a company or business grows so large that the costs per unit increase
-the company becomes big and can’t handle it
-pl. oil prices right now
-pl. too many employees -> some of them don’t do anything
-Technical
-Managerial
-Financial/purchasing
-Marketing
-Employees

Question 3

Reasons for companies to grow or to stay small?

Answer 3

-to grow: survival, esonomy of scale, higher status / market leader status / increased market share
-to stay small:
greater focus
greater prestige
greater motivation
competitive advantage
pl. Hermés: small, more exclusive, people are willing topay more

Question 4

What are the vision and mission statements?

Answer 4

-long-term: 5-10 years
-vision: future oriented, the future goals
-mission: intermediary step, what the company will do to get to the goals
-importance of both? for employees, for customers

Question 5

Aims, objectives, strategies and tactics

Answer 5

-Aims: future goals (5-10 years), can be measured
-Objectives: Long, medium and long term goals(things that help the aim)
->strategic objectives
->tactical objectives
->operational objectives