Economies of Scale

Question

Discussion 1 

Discuss the need for an MNC to “be global and act local.” What are 2-3 specific examples of this? How can a MNC design its organization to enable it to act more locally?

 Discussion 2 

Empirical evidence on the shape of the average cost curve across industries is mixed. A 1992 study, by Robidoux and Lester, found that 57 % of Canadian firms had economies of scale, 23 % had neither economies or diseconomies of scale, and 14 % experienced diseconomies of scale. Can you think of examples of firms or industries that might fall into each category? Why would a firm experience economy of scale? Why would a firm experience diseconomy of scale?

Question

1. Which one of the five basic competitive strategies best characterize your athletic footwear company’s strategic approach to competing successfully?

2. Which rival footwear companies appear to be employing a low cost provider strategy?

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