Over the past 2 months, all I have learned is that
1. Economies of scale: The bigger you get the cheaper it is to manufacture, you can get better price from your supplier, your distribution and advertizement costs (per unit output) will go down.
2. Innovation: Bigger firms can afford to spend larger amounts in R&D, patents, market research etc. which gives them an edge over smaller firms.
3. Professional management. In Larger firms have more competent mangers, who are there by virtue of their abilities and not their pedigree. Hence they are more rational and better.
4. Large firms can diversify their risks. Hence they have a higher probability of surviving a recession.
5. Their brands and products are well recognized and its hard for a small firm to match their marketing skills.
6. Greater pricing power, ability to modify the policies.
7. They usually have multiple functional strengths and core competency. (smaller firms have 1 core competency and idea)
8.
If all this are true, then why is that larger firms have not driven out all the smaller firms out of business? What decides that a particular firm has the required critical mass to gallop in the future as a force to be reckoned with, or its too small and would perish the corporate wars.
BTW: does anybody knows how to upload pdf online. Online file sharing tools force you to download (and takes too much time)
Ankur Aggarwal
sree
Sandip Chaudhuri
vbr
shobhendrasrivastava
