Question

Burberry

Economies of scale-proportionate saving in costs gained by an increased level of production.....Is it easy to do what your company does? Why? What are the fixed assets? How much does it cost to run the business? Is it easy for another company to do the same? Brand loyalty-tendency of consumers sticking with the same brand of products....Does the company have enough brand loyalty of other competitors were to enter the market?

Answer 1

Proportionate saving gained by producing two or more distinct goods, when the cost of doing is less than that of producing separately each

When more units of a good or a service can be produced on a larger scale, with fewer input costs, economies of scale are said to be achieved. this means that as a company production units increase, will have a company better chance to decrease its costs.

Yes Economies of scale-proportionate to saving in costs gained by increased in level of production because when more and more units is produced with less cost, gained save cost.

Yes , it is easy by using these methods such as :

Lower input costs: When a company buys inputs in tons (bulk)

for example, the potatoes used to make French fries at a fast food chain like McDonald's Corp,take advantage of volume discounts.

Specialized inputs: As the scale of production of a company increases, a company can employ the use of specialized worker and latest techniques machinery resulting in greater efficiency. This is because workers would be better qualified for a specific job

Techniques and Organizational inputs larger scale of production company also apply better organizational skills to its resources such as a clear-cut chain of command, while improving its techniques for distribution and production.

Fixed assest are those assets which are purchased for longterm use and not easily converted into cash

Fixed cost is generally high cost for company because fixed cost involve plant and machinery, land etc

Yes it is easy for another company to take advantage of economic of scale by using method of saving cost

Brand loyalty is the tendency of consumers to continuously sticking one brand's products over another.

Consumer behavior patterns demonstrate that consumers will continue to buy products from a same company that has a trusting relationship.

Yes the company have enough brand loyalty of other competitors were to enter the market, by Lower price