Article PDF: 3.4 Dis-Economies of Scale

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Six rules describing how and where openings are created by the size of opponents.

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This article explains why one of the most common reasons that people fail to recognize opportunities is that think of size as an advantage. When we see a large organization, we think that it naturally dominates its competitive area. We talk about the power of economies of scale. Our expectations regarding the value of size are constantly frustrated as one large company after another fails, while new smaller companies rise up to take their place. What is happening? Our problem is that we fail to understand the advantages of size are almost production advantages not competitive advantages. While size is a great advantage in any stable arena or production, as an area becomes more and more competitive, size turns into a disadvantage.