Optimal Size Of A Firm
The optimum size of a firm is a very subjective idea. The ways in which size can help or hinder a firm vary from which angle you a looking at the situation from. Size can have its benefits and its drawbacks, and each firm will have its own benefits and drawbacks that come from either increasing in size, or remaining small, and these will depend on the market in which the firm is in, the current economy, and in some cases the preferences of the manager(s).
For example a small firm may be small for many reasons. It may be small because it has just started out in business, and still has relatively little funds, so although the owner/manager may have aspirations of the business growing, at the present time, his main concern would be keeping the business afloat. Another small business may stay small due to the preference of the manager/owner, for example a corner newsagent's shop may remain a small retail business as the owner is making a profit from the business that he finds acceptable, and does not want the hassle of either expanding his current business, setting up new shops, or taking over another business.
The size of a business does however depend a great deal on the market which it is in. For example a business which makes specialist goods, or caters to only a very small number of people, will not be able to grow beyond the capacity of that market. This means that the optimum size for a business in a market with little growth and only a small number of prospective customers would be large enough to serve as many customers as it had market share for, but small enough to ensure that they don't over produce.
If there is a fairly large market for the product/service that a company is providing, then there is likely to be a large amount of competition in the market. This means that it would be fairly hard for the company to grow in that market unless they did one of three things. Firstly they could come up with a better and cheaper product then the rest of their competitors, if their customers noticed this then the customers would choose their product over their competitors, leading to growth in the company (although internal growth can be one of the slowest, and sometimes one of the most costly methods of growth).
Secondly the company could invest money into giving themselves a recognisable brand name, although this can be a costly procedure, and can take a great deal
can expand through marketing ideas and ways the company can save money by not stocking up on as
-Store brand name enables product to be accepted and adopted more easily by consumers because of brand recognition
Watson, J. M., Bunting, M. F., Poole, B. J., & Conway, A. R. (2005). Individual differences in susceptibility to false memory in the Deese-Roediger-McDermott paradigm. Journal of Experimental Psychology: Learning, Memory and Cognition, 31(1), 76-85.
The first pressure of business is customers. Customers expect low prices and the service it to be top quality as well as the product. This effects the cash the company accrues through sales. If the customer isn’t happy with the product they will find another business to frequent. Customers expect lowers prices and if the company doesn’t deliver then usually there is a competitor close by, so the consumer can and will go to another business to get lower prices. Customers also look at the company 's reputation in the community and how they treat their employees. Our text explains that "customers, in expecting low prices, limit the amount of cash entering a company" (Drafke, 2009. p. 143). These are all factors that influence the customer and where they choose to shop.
transportation, access ability to services that is a barrier to the clients that could play a role.
Experimental designs are viewed as the most accurate, and most demanding of research designs, requiring strict attention to rules and procedures. Researchers use these research designs to manipulate and control testing procedures as a way to understand a cause and effect relationship. Commonly, independent variables are manipulated to judge or decide their effect on a dependent variable (Trochim & Donnelly, 2008).
One hundred and thirteen undergraduate and post-graduate students (80 female, 33 male) enrolled in the unit Cognitive psychology from the University of Canberra, participated in an experiment to test the theory of false memories. The students were given no incentive for participation in the study other than to gain knowledge for an upcoming assignment. The age of the participants ranged from 19 to 55 years (M= 25.77, SD= 8.78 years). The unit ‘Cognitive Psychology’ is a level 2 unit, it is assumed that all participating students already have some existing knowledge in psychology and are at least in their second year of university. There was no missing data in this experiment.
Bartlett’s “War of the Ghosts” experiment (1932) is a classic example of false memories. The results of his study found participants would unintentionally alter the information of a story they read in a way that was more reflective of their own lives. Otagaar, et.al. (2013) examined false memories by developing non-believed memories in adults and children about taking a ride in a hot air balloon. The results of this study found that when the participants were asked immediately after reading a passage about this memory, most did not recall going on a hot air balloon. However, when the participants were called back a few months later, a higher percentage of participants recalled having experienc...
Example: Shopify store Daneson sells luxury toothpicks. You can probably imagine that the market for luxury toothpicks isn’t massive. Being in a small niche like luxury toothpicks can be both a good and bad thing. The small market size will likely limit revenues, but if they do a great job of defining their
...price, it also allows for them to increase their sales and enter into new markets, which in turn would help to increase their profits.
There are high entry costs to enter the market. The large industry competitors already have captured the market share.
... this and their marketing strategy will be key if they are to remain viable, grow and compete in the market.
Potential new entrants: With positive economic outlook, fine business environment, and increasing number of population growth rate, it is expected that there will be more companies coming in the industry;
...ll as private sectors have gone international with new ventures outside the country. These companies are generating revenue, though modest compared to their overall sales revenue, by deputing their expert personnel outside.
company are being negotiated by the customers. According to Tony Nagle (N.D), the top 10 factors for successful