Optimal Size Of A Firm :: essays research papers

Optimal Size Of A FirmThe optimum size of a firm is a very subjective idea. The ways in whichsize fire help or hinder a firm vary from which angle you a looking at the posture from. Size can down its benefits and its drawbacks, and each firm forgethave its own benefits and drawbacks that come from either increasing in size, orstay small(a), and these will depend on the grocery store in which the firm is in,the rate of flow economy, and in some cases the preferences of the manager(s).For congressman a small firm whitethorn be small for many reasons. It may be smallbecause it has righteous started out in duty, and still has relatively littlefunds, so although the proprietor/manager may have aspirations of the businessgrowing, at the present time, his main concern would be keeping the businessafloat. Another small business may stay small due to the preference of themanager/owner, for example a corner newsagents shop may remain a small retailbusiness as the owner is making a profit from the business that he findsacceptable, and does not want the hassle of either expanding his incumbentbusiness, setting up new shops, or taking everyplace another(prenominal) business.The size of a business does however depend a abundant deal on the marketwhich it is in. For example a business which makes specializer goods, or catersto only a very small number of people, will not be able to grow beyond thecapacity of that market. This operator that the optimum size for a business in amarket with little growth and only a small number of future customers wouldbe large enough to serve as many customers as it had market share for, but smallenough to ensure that they dont over produce.If there is a plumb large market for the product/ assistance that a societyis providing, therefore there is likely to be a large amount of competition in themarket. This means that it would be fairly hard for the company to grow in thatmarket unless they did one of ternary things. First ly they could come up with abetter and cheaper product then the rest of their competitors, if theircustomers noticed this then the customers would choose their product over theircompetitors, tether to growth in the company (although internal growth can beone of the slowest, and sometimes one of the most costly methods of growth).Secondly the company could invest money into giving themselves a recognisablebrand name, although this can be a costly procedure, and can take a outstanding deal