Business English

Name: Fernandes Soares Eulanisia

Group: 2

1- Does your company or one you would like to work for, have a cash cow
or a loss leader?

Frankly speaking, I don’t work yet for any company but the company I would like to work
for would have a cash cow.
Cash cow is a product or service that earns a heavy margin and delights a customer.
There’s nothing immoral about earning a high margin, so long as everyone is happy. I
pay $3 for a latte that consumes 20 cents worth of raw materials, and yet I remain a
satisfied customer. The same goes for a concert ticket, a business class flight, an eye
fillet steak, a designer bag or an iPhone. Customers love them, and they generate
serious margins. Cash Cows are often achievable through Value Based Pricing – where
you can offer a customer something really valuable to them, even though it doesn’t cost
you very much to produce.
It is possible to find on the market a series of examples of cash cow, with companies
with products that practically sell themselves.
This is the case with Coca-Cola. The company of the same name needs little
investment in its main product. After all, it is a highly consumed soft drink, with a brand
known to all and of almost universal acceptance.
So much so that, publicly speaking, the other companies that offer similar products
compete for second place in the market.
By having highly profitable and consolidated products in the market, the company
becomes a cash cow company. Thus, it is not necessary to raise new investments. Just
reallocate the profits obtained with your main product to the other activities of the
business.
Cash Cows are excellent.

2- Does your company or one you would like to work for, benefit from
economies of scale?
The company I would like to work for benefit from economies of scale. This is because
Economies of scale is an important concept for any business in any industry and
represent the cost-savings and competitive advantages larger businesses have over
smaller ones.
Economies of scale is cost advantages reaped by companies when production
becomes efficient. Companies can achieve economies of scale by increasing production
and lowering costs. This happens because costs are spread over a larger number of
goods. Costs can be both fixed and variable.
The size of the business generally matters when it comes to economies of scale. The
larger the business, the more the cost savings.
There are two main types of economies of scale – external and internal. Internal
economies are caused by factors within a single company while external factors affect
the entire industry.

The benefits of economies of scale for industries and businesses are wide-ranging, as
well as for customers.
For industries and businesses: Reduced long-term unit costs, Increased profits,
Larger business scale.
For customers: Lower prices, product improvements, higher wages.

When a business becomes too large, its unit costs may begin to rise. This is referred to
as a diseconomy of scale, and it’s a major drawback that growing businesses need to
pay attention to. In addition, the benefits of internal economies of scale for consumers
may not be as impressive as they appear and It’s also worth remembering that the
environmental consequences of mass production can be significant, from pollution to e-
waste.