Nowadays, there is a tendency of globalization and scaling the production to immense quantities. This, therefore, leads to an increase in big corporations, meanwhile small and medium businesses can barely stay afloat. However, the benefits of this trend are rather dubious. This essay will demonstrate the advantages and drawbacks of such changes, and why small companies are essential to our economy.
Without a doubt, large multinational companies bring several benefits to the end-consumers. Firstly, due to economies of scale, big businesses are able to optimize production, reduce costs, and sometimes, as a result, lower the prices. Secondly, global mass production allows them to supply their products to any country in the world, meanwhile small businesses do not generate enough profits to justify such distribution.
Nevertheless, I believe that the disadvantages outweigh the advantages, and small businesses are still crucial for the consumers. Big companies focus only on mass production of a standardized products, that will be suitable for as many people as possible, which leads to the decline in diversity. Small businesses have more opportunities to create products for different target audiences, creating bigger range of products. Moreover, without small companies international corporations have no competition, in other words, they create a unique product with no alternatives or substitutes and can set the prices as high as they want. Finally, because of economic globalization people are more exposed to financial crises, as problems in one international company will affect the whole global economy and can undermine the production of vital things such as food or medicine.
To sum up, even though big companies can provide cheaper pricing and larger distribution, the disadvantages are damaging the economy that needs small businesses to thrive.