Boost Juice Case Study Essay

3 reasons for advertize juice experiencing economies of collection plate1 Purchasing inputs and crude(a) somatics in great deal Buying in majority heart that the average address of from from individu completelyy unmatched matchless social unit of measurement of raw material is cheaper than if each unit was bought individually In one year alone, come along succus goes by dint of to a greater extent than 35 tonnes of mangos and you still bring on all of the other(a) range of takingss that ar bought. Therefore get in come out means that the average woo of the raw material decreases which and so, using the entrap chain, means that the average cost per create decreases as output increases. As the order value increases, a business obtains more than talk terms cause with suppliers. It may be up to(p) to obtain discounts and lower prices for the raw materials2- Cheaper selling costs pet topic delinquent to the quick expansion of boost since it was f ormal in 2000 (on average one naked boost store opens e truly 4 days) has meant that the cost of advertising per outlet has reduced (e.g. if you had one outlet and advertising cost $10,000 and then the business expanded to 10 outlets it would mean that cost of advertising per outlet would go from $10,000 to $1000) This has en equal to(p)d boost to undergo march on marketing strategies which in turn brings more consumers to the product meaning that the price of each unit output would decrease3-Economies of plateful can be defined as reductions in costs per unit of output as output increases and so at that placefore arise when the cost per unit waterfall as output increases. They be the nest egg of size of it if a firm is capable to increase the size of its plant or operations in the long engage production period. A business that is experiencing economies of home base in the present is the smoothie and juice making company called Boost Juice. set up in 2000, Boost Juic e, managed by no-hit entrepreneur Janine Allis, is a business that has been able to be extremely successful by dint of domination of their market and a modus operandi of marketing strategies that has enabled them to grow in size and thus currently be experiencing economies of scale.Since the very first Boost Juice was undefendable in 2000, the next 6 age saw the opening of 189 new stores and the rapid growth is still occurring today. There are two main types of economies of scale, internal and remote each of which are leading factors as to why a business may currently be expericing economies scale. Within this drive study of the extremely profitable and highly successful business Boost Juice I exit be discussing 3 of the reasons why Boost Juice are currently experiencing economies of scale which are bulk buying, cheaper marketing costs and As tell above, economies of scale can occur delinquent to both internal and external factors. 1 of the key internal factors of which has led to Boost Juice experiencing economies of scale is bulk-buying of raw materials and other inputs. Bulk buying can be defined as buying goods/ materials/ other inputs in large quantities which becomes highly germane(predicate) to business that are undergoing or bring already expanded as a business due to the cost advances that are associated with bulk buying. The leading cost benefit associated with the bulk buying is that the average cost of each unit of raw material is far cheaper that if each unit were bought individually. As businesses grow its essential that they order big quantities of production inputs so that they can wreak the increased demand and production.As the order value of wanted raw materials increases a business is able to obtain monopsony (buying) power with its supplier/s. This is extremely applicable to Boost Juice. Boost Juice is a highly successful harvest-festival juice retail merchant thus requiring extremely large quantities of fruit (along wit h the other needed inputs). In one year, Boost Juice goes by means of more than 35 tonnes of mangoes alone and when you consider all of the other fruits that Boost Juice will have to purchase as inputs there is an extremely large quantity of fruit that needs to be supplied. Therefore buying in bulk is much more cost effective as it makes the unit price per input much cheaper through and through the cost volume benefits of buying in bulk. Therefore, Boost Juice has been able to acknowledge economies of scale in the present through bulk buying which drastically reduces the unit price per input, which reduces the cost of output.