Economies of ScaleThe advantage of the supply and the demand side in making the gross production costs lower and product needs of customers rather than competitors is an advantage that straightforward and easy to understand. But the advantage of both bad and good are not sustainable. Economies of Scale (EoS) is a supply and demand coordination of advantage accordingly. Cause of sustainable (durable competitive advantage) is one thing that is wrong is that the understanding of EoS, the size of the undertaking, or capacity. When the joint venture with EoS vision people commonly think of acts that have a high capacity. To very high There are a lot of factories or branches have many items in stock or have distribution in markets around him. EoS, the difference between the scale of the business, when compared to competitors in the market. The joint venture with EoS, can build market share, above the competitors. When the items are more manufacturing/sales will cause a decrease in unit cost is compared even with the cost of raw materials or technologies in the same production as long as the competitors are not able to produce the goods in the same scale. EoS of the very evident when undertaking the cost of operation of the business (operating cost) mainly fixed costs (fixed cost) due to increased capacity (scale), how much more would make the cost of an item per unit decreasing from an average fixed cost per unit of the item that this cost may be the best factories. Machinery, warehouse, or even the cost of advertising or promote thasinkha, etc. EoS alone may not be enough to protect new entrant into the market. A new competitor that has funding and strong support, they may succumb to losses during the first to invest in the production, a level comparable with the market, but has a joint customer to captivity some EoS will make the owner market has the advantage, and the new competitor will scramble the market easily. In this case, to get the scale of investment is high, there is a problem with the fixed cost is very high, because the joint venture itself, while not able to paint items the market has enough. To make the item unit cost does not decrease or increase in cost from the stocking.
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