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: Specialization
Specialization, in economic terms, means focusing on one task rather than multiple tasks, which allows workers to perfect that one task. This is a basic concept of learning. When a person attempts a specific task for the first time they may not be proficient at it. The more time spent on practicing or learning a skill, the better an individual gets at it. And the more efficient. Specialization Leads to Economies of Scale
As labor is divided amongst workers, workers are able to focus on a few or even one task. The more they focus on one task, the more efficient they become at this task, which means that less time and less money is involved in producing a good. Or put another way, the same time and the same money allows for the production of more goods. Once specialization occurs, resulting in economies of scale, a company is able to reduce the price for its goods or services because it costs less to make their goods or provide their services. This provides a competitive advantage in the market place.