Page 11 - BrewDog Industry Analysis
P. 11
Economies of Scale & Scope
Where economies of scale are characterized by volume
economies of scope are characterized by efficiencies formed
by variety. The former involves the reduction of the average
cost, or the cost per unit, that stems from increasing
production for one single type of product.
As a company grows and production output increases, a
company will have a better chance to decrease its costs
especially as specialisation and the division of labour take
effect.
