Question
Highlight four strategies that a small firm could adopt to expand so as to enjoy economies of scale.
Answer
- through vertical or horizontal integration with other firms
- rationalizing its operation so that it can cut down on wasteful expenditure by concentrating on its core activities and outsource the core areas.
- Regulating loans and other credit facilities in order to expand the capital base
- Looking for market in order to increase its level of sale
- Forming cartels to monopolistic the market with similar enterprises
- Ploughing back its profits to expand its financial base base
- Use of appropriate technology to improve the quality and quantity of its products
- Arranging for franchises to get rights to produce or sell goods or services of more established business
- Acquisition of other business in a similar line of activity to widen the scope of its operations.
- Diversification of operations in order to produce a variety of goods and services that can capture a wider market.
- rationalizing its operation so that it can cut down on wasteful expenditure by concentrating on its core activities and outsource the core areas.
- Regulating loans and other credit facilities in order to expand the capital base
- Looking for market in order to increase its level of sale
- Forming cartels to monopolistic the market with similar enterprises
- Ploughing back its profits to expand its financial base base
- Use of appropriate technology to improve the quality and quantity of its products
- Arranging for franchises to get rights to produce or sell goods or services of more established business
- Acquisition of other business in a similar line of activity to widen the scope of its operations.
- Diversification of operations in order to produce a variety of goods and services that can capture a wider market.
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