"Economics of scale": when costs per unit-of-whatever created go down as total output increases. Economies of scale is the reason Walmart and Amazon and all big companies can make stuff so much cheaper than the little guys; they’ve got lots of capital and resources, making each thing cheaper to make, the bigger they get. So...diseconomies of scale.
Yep, it's as bad as it sounds.
Diseconomies of scale is when a company grows sooooo large it actually starts costing more money per additional unit-of-whatever created, the more of whatever they make. Diseconomies of scale is the opposite of economies of scale: making more and more starts to look like a bad idea rather than a good idea.
How could this happen?! Well, really, really big companies have a lot of resources and people to manage. It’s easy to see how, if it got too big, and that big-ness wasn’t managed well, it could become bloated and inefficient, making things more expensive rather than more efficient.
Related or Semi-related Video
Finance: What does it mean to "scale"?57 Views
Finance allah shmoop What does it mean to scale Well
here's a squid eyeball from space fifty miles away and
here's a squid eyeball from our boat the pesca squid
alia's from a mile away and here's a squid eyeball
from the view of our iphone we just dropped in
the water when the squids when right beneath the boat
scaring the crap out of us literally at one scale
we could barely see the ocean At another scale We
saw way too much eye ball scale and business has
the same kind of dramatic effect as operations come into
play That is it's One thing to serve lemonade drinks
to one hundred people a week It takes one stand
a permit grocery store visits worth of supplies it's completely
Another thing Toe serve a million drinks a week for
the latter You need infrastructure trucks storage and armies of
servers to you know serve Yeah that's what they do
someone's gotta get lemonades to the people So when a
company scales it means that they have gone from a
modest few million dollars of sales to sales of maybe
one hundred million and then a billion Some like that
The skill set for the former is a vastly different
set than for the ladder and some people are able
to do both Howard schultz founder and ceo of starbucks
We're looking at you well starbucks started off is just
one store in seattle in like five minutes later there
were a gazillion of them all over the world thinking
of coffee in any language So yeah that's How a
company scales from you little toe Big big Incidentally you'll
want to stay off the scale if you consume venti
caramel frappe with whip on a daily basis but on 00:01:44.897 --> [endTime] there so good
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