Imagine Company A only mows lawns and Company B mows lawns, trims flower beds, and cuts down trees. Company A would have some advantages and disadvantages to only doing one service, where company B would also have advantages and disadvantages. Specialization is when a company only supplies one good or service, such as Starbucks coffee. Specialization has pros and cons and, using the lawn example, I will demonstrate these.
First, Company A would have an advantage over Company B because they could spend all their money on only mowing equipment, getting the best equipment out there. They would also be able to perfect the “art” of mowing lawns and become quicker and more efficient on the mower. Along with these advantages they would also have disadvantages over Company B. Company A would only be able to mow lawns no other yard work, which would cause them to lose clients and not be able to offer the whole package of lawn service.
On the other hand, Company B would be able to take those clients and give them all the service they need. Their advantage would be that they have all the tools to do all the yard work. Company B also has disadvantages of being able to “do it all”. They would have to spread their money out and not get the best equipment out there. They would also have to concentrate on different aspects of the job taking away of perfecting one thing. Both companies would work for getting your grass cut but, which one would you choose?
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One of the advantages of specialization is reduced production costs, which would typically lead me to think that a company who specializes in one thing (Company A), showed be able to charge a lower fee for their product. However, this is not the case in Starbucks coffee. I think that when people purchase a good or service, they tend to look at not only quality, but cost as well. If a nice lawn is all you want and it is cheaper than paying another service, I'd go with A and hire another company that specializes in cutting trees and trimming the flowers beds!
ReplyDeleteI think that in most cases, the pros of specialization outweigh the cons. Being able to buy the biggest and best equipment, and being able to perfect what you do is definitely an advantage. Also, when you're specializing in something consumers remember you when thinking of your good/service. For example, when you think about places to go to get a cup of coffee, Starbucks probably comes to your mind before McDonald's does, even though they both serve what you're looking for. I would choose Company A because they would probably do a better job than Company B.
ReplyDeleteIf it was me, I'd choose Company B. Since they haven't specialized exclusively on lawn mowing, I can pay them to take care of the more annoying aspects of caring for a lawn, like yanking out weeds, laying out mulch, etc. I can mow my own lawn, and pretty well too. :)
ReplyDeleteNormally, specialization has better pros than cons, but in this instance, I think yardwork services would do better to know various aspects of such an endeavor instead of just one.