Economies of Scale and Fast Food Nation - Food Inc - Essay Example

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 food to its consumers on the local along with global scenes. The company has been offering fast food to various classes of customers including 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 its activities while at the same time maximizing its profits (Mankiw, 141). In consolidating its activities, Fast food Nation has been able to acquire many other smaller companies in different countries to expand the scope of its 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 to diversify its activities while expanding its 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 its 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 with other smaller but similar companies have enabled the company to expand their activities across borders which enables them to achieve economies of scale in their operations (Kroeger, Vizjak, Moriarity, .96).

Finally, Food Inc. is a documented American film that offers insight into 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 utilizing technological advances that greatly assist 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 scale in their operations (Baumol & Blinder, 77). Industries dealing in the food production sector can achieve consolidation by the use of mergers between many small companies to form larger ones, which will help them in achieving economies of scale.