Title: How Does Specialization Help Companies Achieve Economies of Scale?
Headings: How Does Specialization Help Companies Achieve Economies of Scale?
How Does Specialization Help Companies Achieve Economies of Scale?
Economies of Scale
Specialization
Specialization Leads to Economies of Scale
Example of Specialized Labor and Economies of Scale
Additional Economies of Scale
The Bottom Line

Content: For example, one worker would add the breaks, the next worker would add the pedals, and so forth. Each worker would become proficient in their specific task and allow the bike to be assembled faster as it moves down the assembly line. This increases efficiency and allows for additional bicycles to be produced. Because production increases, the fixed costs of production such as the building and tools used to assemble the bicycles are spread over an increasing number of products, thus achieving economies of scale. Additional Economies of Scale
Though specialized labor is one method that leads to economies of scale, economies of scale can be achieved through a variety of means. Some areas include technology that improves efficiency, the power of buying bulk that leads to better costs, and for larger companies, better terms on financing and better transportation networks. The Bottom Line
Economic theory and the actual implementation of those theories have proven that as a company's workforce specializes in specific skills, it leads to efficiency, which leads to more goods produced. As more goods are produced, the cost of producing them is spread out, leading to economies of scale, which is an important competitive advantage for any company.