How can companies achieve economies of scale in BSG?

Achieving economies of scale is primarily about increasing production volume, which allows companies to lower their average costs per unit. As production volume increases, fixed costs are spread over a larger number of units, leading to a reduction in the cost per unit. This can occur due to a variety of factors, such as more efficient use of resources, bulk purchasing of materials, and streamlined production processes.

When a company boosts its production capacity, it can negotiate better terms with suppliers, thereby reducing material costs. Additionally, increased volume can lead to learned efficiencies, where workers become more skilled and operations become more efficient over time. This strategic focus on volume can help a company maintain a competitive edge by offering lower prices or higher profitability margins. In the context of the Business Strategy Game, pursuing economies of scale through increased production volume is a fundamental tactic for establishing market dominance and enhancing overall business performance.