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Mind Map by katie.brightwell, updated more than 1 year ago
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Created by katie.brightwell
over 11 years ago
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Economies and Diseconomies
of Scale (for a brewery)
- Economies of Scale
- Marketing Economies
- When buying ingredients for beer such as yeast, the
firm will get cheaper prices when they buy in bulk
- When buying ingredients for beer such as yeast, the
firm will get cheaper prices when they buy in bulk
- Technical Economies
- When a brewery expands it's size, it will produce more beer than a smaller
brewery. This means that if both brewerys used the same equipment, the
larger brewery would be getting more use out of the machinery.
- When a brewery expands it's size, it will produce more beer than a smaller
brewery. This means that if both brewerys used the same equipment, the
larger brewery would be getting more use out of the machinery.
- Financial Economies
- Larger business can usually get cheaper loans than small businesses. This means
that if the brewery were to take a loan out to purchase a new site, the intrest on
the loan would be cheaper.
- Larger business can usually get cheaper loans than small businesses. This means
that if the brewery were to take a loan out to purchase a new site, the intrest on
the loan would be cheaper.
- Managerial economies
- As the Brewery grows, it will be able to afford specialist managers.
They will be in charge of specific fields such as a production manager.
By having specialist managers the brewery's efficiency will grow -
which lowers the average cost.
- As the Brewery grows, it will be able to afford specialist managers.
They will be in charge of specific fields such as a production manager.
By having specialist managers the brewery's efficiency will grow -
which lowers the average cost.
- Marketing Economies
- Diseconomies of Scale
- Bureacracy
- A brewery may experience bureaucracy when
resources are wasted in Administration.
- A brewery may experience bureaucracy when
resources are wasted in Administration.
- Labour relations
- As the brewery business grows, the relationships between the workers and their managers
will become less personal. This means that the work force inside the brewery will care less
about the success of the business, which will demotivate them and lower their production
rate. It also means that any disputes between workers and mangers will not be so easily
settles, and therefore the business may waste resources fixing them.
- As the brewery business grows, the relationships between the workers and their managers
will become less personal. This means that the work force inside the brewery will care less
about the success of the business, which will demotivate them and lower their production
rate. It also means that any disputes between workers and mangers will not be so easily
settles, and therefore the business may waste resources fixing them.
- Co-ordination
- If the brewery become a multi-national company, it
would need extra investment to ensure the business
ran smoothly in all it's plants. This will increase the
need for supervision, which will bring up the average
cost.
- If the brewery become a multi-national company, it
would need extra investment to ensure the business
ran smoothly in all it's plants. This will increase the
need for supervision, which will bring up the average
cost.
- Bureacracy
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