Economics Of Scale Essay

Words: 344
Pages: 2

Rodney Simms
Aurora University
Economics of Scale
Sara Olsen

Whenever a family move into a new into their new residence the first thing a consider is devising a blueprint for their new home. However, IKEA has successfully assisted consumers on successfully arranging their home. I believe a key factor that distinguishes IKEA from other furniture stores are the multiple room set-up that are displayed throughout the store. Below I have developed Economies of Scale and Diseconomies of Scale.

Economics of Scale:
1. IKEA established low prices compared to competitors to create appeal amongst customers. IKEA was successfully able to make this happen by devote large amounts of money over to research and development. In result, IKEA became enable to create new products that have been researched, or developed new techniques to make sure the quality exceeded company expectations when depicting company image.
2. IKEA has benefited from is bulk buying. Bulk buying has been beneficial to IKEA because this enables them to purchase materials in bulk at a cheaper price to extensively maximize on profit and reduce on additional shipping. In addition, with IKEA purchasing goods in bulk helps IKEA to develop a successful relationships with various manufactures.
3. IKEA has launched IKEA continues to advance in the markets establishing restaurant and food markets throughout many stores serving food at various hours of the day and childcare assist families as they shop around throughout