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Why do small firms manage to survive despite not enjoying significant economies of sc

I really don't understand why the larger firms don't completely dominate the samller firms in an industry. We've seen it to a large extent with supermarkets and in other industries, but why aren't smaller firms almost completely obselete.

Please keep on topic and in reference to the question in title.

Thanks for all your help in advance :smile:
Reply 1
Avatar for WiBurn
WiBurn
Smells like we're going to be helping you with an essay here so I'll keep it vague.

Small firms which survive/thrive tend to be specialised in one way or another.
slightly differentiated products and thus customer loyalty
Reply 3
Avatar for Nick_000
Nick_000
16
USP's perhaps.

Economies of Scale are an advantage but not a necessity. Not everyone competes on price.
Reply 4
Avatar for danny111
danny111
3
because the LRAC reaches its minimum at a low level of output.
Reply 5
Avatar for goldsilvy
goldsilvy
15
Niche market, low PED, high YED. Possibly.
Reply 6
Avatar for 852er
852er
Niche markets,
Certain advantages (like monopolies in a small town etc)
Adaptability
Niche/prestige market
Customer loyalty/preferences
Barriers to monopoly. Why is it that Co-op and Tesco don't just buy up all the small corner shops?
Reply 8
Avatar for The Gaffa
The Gaffa
1
Small firms are more flexible, and can more easily adapt to customer needs than large firms.

There are also industries where economies of scale are relatively insignificant so large firms don't have too much of a cost advantage over smaller firms.
size isnt everything#

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