Describe the external economies of scale, Financial Management

Assignment Help:

In the 2000s the German discount chain Aldi began an expansion on the east coast of Australia. One strategy of Aldi is to encourage small retailers such as butchers, bakers, delicatessens, chemist shops, newsagencies, dry cleaning and petrol retailers to locate close to Aldi stores. This is because Aldi has a narrow product range with only about 600 product lines compared to Coles’ average of 30,000 lines. Most of Aldi’s lines are private label produced only for Aldi, which is one of the key reasons why Aldi can compete with the huge buying power of Coles and Woolworths. Aldi encourages the small retailers to set up close to its stores to help offset the disadvantages arising from its narrow range of lines. 

Questions

Using the concept of external economies of scale, summarize Aldi’s objective in encouraging small retailers to set up close to Aldi stores.

Describe the external economies of scale for Aldi and the small retailers that can arise from an increase in customer traffic and sales.

Describe the internal economies of scale for Aldi if the availability of a wide range of small retailers adds to the customer traffic for its stores.


Related Discussions:- Describe the external economies of scale

Fixed weight aggregates method - fisher''s ideal method, Fixed Weight Aggre...

Fixed Weight Aggregates Method In fixed weight aggregates method, the weights used are neither from base period nor from current period but from a representative period. These

Leverage, Evaluate the importance of leverage in financial management of a ...

Evaluate the importance of leverage in financial management of a small scale company

Fin 534 financial management homework solutions to c, Need help with explan...

Need help with explanations for the answers chosen, not good with math calculations, or explaining the answers, can you help with this.Chapters 6, 8

State the example to calculate the present value, State the Example to calc...

State the Example to calculate the present value 2, 00,000 $ is the amount which you require after 20 years for your retirement. How much must you invest now at 5% per annum co

What are the time dimensions of the income statement, What are the time dim...

What are the time dimensions of the income statement, the balance sheet, and the statement of cash flows? Hint: Are they videos or still pictures?  Explain. Sol. The i

Financial control, Internal capital rationing is used by firms for exercisi...

Internal capital rationing is used by firms for exercising financial control. How does a firm achieve this?

Mushrooming of public private partnerships, Question 1: i) Activity Bas...

Question 1: i) Activity Based Costing is better than the Traditional Product Costing. Discuss, by making use of empirical evidence ii) The replacement of cash-based accounti

Describe the dividend yield method, Q. Describe the Dividend Yield Method? ...

Q. Describe the Dividend Yield Method? Dividend Yield Method: - This process is based on the assumption that when an investor invests in the equity shares of a company he expec

Illustrate the nature of financial management, Q. Illustrate the Nature of ...

Q. Illustrate the Nature of Financial Management? Less Descriptive as well as More Analytical: - Financial management is less descriptive and more analytical. Because of the

Common size financial statement, Common Size Financial Statement Common...

Common Size Financial Statement Common Size Financial Statement is a company financial statement that shows all items as percentages of a common base figure. This kind of finan

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd