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Food industry - Essay Example

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It also refers to the reductions in the cost per unit that an enterprise witnesses due to an increase in its size or their…
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Food Industry The term ‘economies of scale’ usually refers to the advantages in cost that a business will obtain as a result of expanding their activities. It also refers to the reductions in the cost per unit that an enterprise witnesses due to an increase in its size or their consumption of inputs (Mankiw, 45). On the other hand, the term consolidation refers to the process whereby businesses acquire other smaller entities combining them to create much larger companies (Kroeger, Vizjak, Moriarity, 67).
Fast food Nation offers fast foods to its consumers on the local along with global scenes. The company has made great advances in the production of fast foods through their kitchen prototyping, standardizing, self-serving along with fundamental changes in their marketing demographics (Schlosser, 212). The company has been offering fast foods to various classes of customers who include teenagers and the elderly. The beef department of the company is currently being dominated by immigrants who offer cheap labor in the various branches that the company has opened up across the globe. Through the process of recruiting more cheap workers, the organization has been able to expand their activities while at the same time maximizing their profits (Mankiw, 141). In consolidating their activities, Fast food Nation has been able to acquire many other smaller companies in different countries for the purpose of expanding the scope of their activities (Schlosser, 79). For instance, the company has acquired companies that indulge in packing meat such as Kenny Dobbins along with IBP Inc. They have been additionally able to ensure that all the outlets deal with uniform franchises (Kroeger, Vizjak, Moriarity, 89).
The Omnivore’s dilemma offers a wide variety of foodstuffs for humans that range from industrial and organic foods and the foods we scavenge for ourselves such as meat products (Pollan, 62). The company manufactures the above meals in an effort to diversify their activities while expanding their activities across national along with international boundaries. They have enjoyed economies of scale with their production costs decreasing over the years as a result of using cheaper forms of labor, the use of technology in their activities and advanced production methods (Mankiw, 132). The company acquires its raw materials from many areas, which implies that they rarely have shortages in their production. The company’s production has however faced problems as a result of animal diseases which affect their production along with the marketing of their products (Pollan, 73). In their efforts of countering these setbacks, the company currently purchases its raw products from suppliers whom they know well since they are assured of their superior quality. The company’s consolidation efforts of other smaller but similar companies have enabled the company to expand their activities across borders which enables them to achieve the economies of scale in their operations (Kroeger, Vizjak, Moriarity, .96).
Finally, Food Inc. is a documented American film that offers insight on the insecurity posed by meat products as they are described as being unhealthy (Weber, 39). The film focuses on ensuring the safety of their workers, protecting the farmer’s livelihood and protecting their environment. According to Food Inc. reductions in production costs as a result of food companies expanding their activities across borders and their utilizing of technological advances that greatly assists them in production (Weber, 51). It additionally states that the meat products being offered to the consumers by several companies are obtained cheaply from suppliers thereby enabling the selling companies to achieve economies of scales in their operations (Baumol & Blinder, 77). Industries dealing in the food production sector are able to achieve consolidation by use of mergers between many small companies to form larger ones, which will help them in achieving economies of scale.
Works Cited
Baumol, William J. & Blinder, A. S. Economics: Principles & Policy, 2011: London: Cengage Learning.
Kroeger, Fritz. Vizjak, Andrej, Moriarity, Mike, Beating The Global Consolidation Endgame: Nine Strategies For Winning In Niches, 2008, New York: McGraw-Hill Publications.
Mankiw, N. Gregory. Principles of Economics, 2011. London: Cengage Learning. Print.
Pollan, Michael, The Omnivore’s Dilemma: The Search for a Perfect Meal in a Fast Food World, 2007. New York: Bloomsbury Publishing. Print.
Schlosser, Eric. Fast Food Nation, 2012. New York: Houghton Mifflin Harcourt.
Schlosser, Eric. Fast Food Nation; What The All-American Meal Is Doing To The World, 2002. New York: Penguin Books Limited.
Weber, Karl. Food Inc.; How Industrial Food Is Making Us Sicker, Fatter and Poorer-And
What Can You Do About It, 2009. Washington, Public Affairs. Read More
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