Operations Management

Outline how a strategy of globalization will impact on a policy of pursuing economies of scale advantages

Globalization is now becoming a critical aspect in regards to business operations. Due primarily to technological advances, and economic development, a more interconnected world is becoming standard. As such companies that rely primarily on fixed assets will depend more heavily on economies of scale to reduce the unit cost of each unit produced. Due to globalization, it is not uncommon for fixed assets to be structured geographically in a multitude of countries. By having operations domiciled in various countries, companies can further their cost advantages through economies of scale. Global auto manufactures use this technique extensively in the production of their vehicles. Auto manufacturers rely heavily on fixed assets to produce and assemble vehicles. These assets irrespective of production will cost the company. As such Toyota has incentive to spread the...
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