Seven Characteristics of Competitive Companies

Seven characteristics describe the most competitive companies: Market share matters: The 80th share point isn’t as important as the 81st, but don’t let it drop to 79! Understand and remember precisely what business you are in. Whether it’s broke or not, fix it – make it better; whether it be products or the whole company. … Continue reading Seven Characteristics of Competitive Companies

Competitive Advantage: Economies of Scale

Economies of scale represent the classic source of cost advantage. It basically refers to a situation where a firm can decrease the average cost per unit by increasing the total output. Economies of scale is also equivalent to an increase returns to scale situation, meaning that if we increase the inputs by X% the outputs will consequently increase by more than X%.