The paper defines the concept of economies of scale and describes its economic advantages to organizations. The efficiency concept is discussed in regards to the managerial, specialization and cost related economies of scale. Application of the efficiency concept in real life organizations has been depicted through already existent research and literature review.
The cost concept of economies of scale is then discussed along with the networking, technical and capital investment economies of scale. The issue of bulk trade is highlighted and the application of the cost concept has been shown in the paper. Examples of the efficiency and cost based economies of scale have been highlighted
The external economies of scale have also been discussed relevant to the organizations as well as the industry. Furthermore the strategies used by smaller firms to co exist and operate competitively in the presence of large firms have been discussed.
Conclusively recommendations have been provided for large scaled as well as smaller structured organizations for operating with innovativeness, efficiency and competence in the markets.
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