Economies of Scale

• Purchasing: Growing businesses can increase the quantity of raw material orders which can lead to discounts being offered, lowering prices.
• Technical: Growing businesses can afford new machinery and equipment, increasing efficiency.
• Financial: Bigger companies find it easier to borrow large sums of money as they're seen as more 'credit worthy'.
• Administrative: Large companies can afford to hire specialists like accountants and human resources managers which increases efficiency.
• Economies of scale result in lower unit cost.