Multi-product company
In business administration , multi-product companies are companies that produce at least two products or services at the same time in their own production . The one- product companies are in contrast .
General
Multi-product companies can have chemical / physical / technical reasons, as in the case of joint production , where in addition to the main product ( e.g. motor fuel in refineries , gas in gas works ), by-products (light heating oil or coke and tar ) are inevitably produced. However, there are also voluntarily organized multi-product companies that, like Henkel , produce detergents and cleaning agents , beauty care and adhesives simultaneously. The products are production- heterogeneous such that it frequently in different factories with different production systems are manufactured. In the case of multi-product companies, however, it is not a prerequisite that all products have to be produced on a single production facility.
Production in multi-product companies is characterized by the fact that - with very heterogeneous products / services - different production factors must be used simultaneously. Already the factor materials must enter into the production with different types and quantity units of raw materials , operating materials and auxiliary materials as well as semi- finished and finished products , so that they are “ intended to serve as raw materials for the manufacture of products, therefore after changes in shape and substance have been made or after incorporation into the finished product, they become part of the new products ”. Therefore, multi-product companies require a special structure and process organization .
Production process
The production in the multi-product company runs as joint production , variety production or series production or a mixture of these. If only different pack sizes (e.g. for detergent packs: small pack, family pack) with identical ingredients or different clothing sizes (e.g. sizes S / M / L for only a pair of men's trousers) are produced, this is a single-product company. However, if there are different ingredients (for detergents: washing powder or liquid detergent), these are different products of a multi-product company.
If different vehicle models are manufactured in the same production facility in automobile production, assembly line production must be converted for each model as part of work preparation . The structure of production in the automotive industry may also be understood as a closed interval algebra, for the successive production stages forming a sequential material flow path , wherein the individual sections (intervals) in each case by a detection point ( the point of delivery ) are separated from each other. Based on this structure, the entire production process can be planned and controlled using appropriate control loops. In this way, each model goes through several production stages during flow production up to the merging of the body with the engine or the complete drive train - the so-called "marriage".
In banking , universal banks are always multi-product companies, while specialist banks are often single-product companies. In the insurance industry , multi-product companies that offer several types of insurance predominate , while the so-called monoliners with only one type of insurance are rarely found. If several dishes are produced simultaneously in a restaurant , then there is also a multi-product company in this service sector .
Production relationships
More product companies are in the form of parallel production (production unconnected) or composite production , with the latter in alternative production and joint production divided. In the case of parallel production , the production processes are technically separate from one another; in the case of alternative production, the products compete for common free production capacities .
economic aspects
As part of the horizontal diversification , the production program of a single-product company can be expanded to include products that are related to the previous product so that the same production processes , raw materials , technologies or sales channels can be used. In this way a one-product company emerges from a multi-product company.
The mass production is available in single-product company, in multiproduct firms it is mostly used as mass production instead; In both types of company, it is associated with a high degree of product homogeneity within each individual product. There may be interdependencies in production and sales within the products / services . In addition, very heterogeneous products require different production processes.
Another difference is that cost and performance accounting is much more difficult in multi-product companies because each product has to be viewed individually as a cost unit . In addition, the total cost method in multi-product companies is neither suitable for the purpose of success analysis nor for sales control. According to the cost allocation principle, the fixed costs can not be allocated to an individual product. In multi-product companies, the break-even analysis must be based either on a multi-dimensional combination of output of all products or on an average contribution margin per sales revenue (DBU). The break-even analysis can look like this:
| product | Sales quantity (piece) |
Selling Price (€) |
Sales (€) |
Variable costs (€) |
Contribution margin (€) |
|
|---|---|---|---|---|---|---|
| A. | 100,000 | 1.20 | 120,000 | 100,000 | 20,000 | 17% |
| B. | 20,000 | 7.00 | 140,000 | 60,000 | 80,000 | 57% |
| C. | 30,000 | 3.00 | 90,000 | 30,000 | 60,000 | 67% |
| D. | 50,000 | 1.00 | 50,000 | 10,000 | 40,000 | 80% |
There are a variety of sales volume combinations, all at the break-even result. The determination of a cover turnover is then only possible if the quantitative composition of the turnover remains constant.
One-product companies are monostructured because they only offer one product or service. They are not or hardly diversified and are more susceptible to negative market developments . The diversification effect of multi-product companies in sales consists in the fact that they can offer their products / services on several economically independent sales markets and can thus better compensate for an economic ( recession or market growth ) or structural sales risk ( supply or demand shift ) than single-product companies. Multi-product companies can achieve composite effects if it is more cost-effective to produce several different products in just one company than in two or more independent single-product companies. These combined effects can lead to cost reductions "if the costs of producing two products together are lower than those of producing them separately". Multi-product companies can monopolize the market if unrestricted horizontal integration is possible.
Individual evidence
- ↑ Erich Gutenberg , Fundamentals of Business Administration , Volume 1: Die Produktion , 1983, p. 122
- ↑ Hermann Meyhak, Simultaneous overall planning in the multi-stage multi-product firms , 1970, p.26 f.
- ↑ Verlag Dr. Th. Gabler, Gabler Wirtschaftslexikon , Volume 4, 1984, Sp. 282
- ↑ Wilmjakob Herlyn, PPS im Automobilbau , 2012, pp. 134–144
- ↑ Wilmjakob Herlyn, PPS im Automobilbau , 2012, p. 213
- ↑ Springer Fachmedien Wiesbaden (ed.), Compact Lexicon Economic Theory , 2013, p. 247
- ↑ Hans Jung, General Business Administration , 2010, p. 579
- ↑ Horst Wildemann, mass production , in: Wolfgang Lück (Ed.), Lexikon der Betriebswirtschaft , 2004, p. 455
- ↑ Michael Laker, The Multi-Product Enterprise in a Changing Unsafe Environment , 1988, p. 5
- ↑ Carl-Christian Freidank, total cost method , in: Rolf Bühner (Ed.), Management-Lexikon , 2001, p. 310
- ↑ Ulrich Döring / Dietrich Jacobs, break-even analysis , in: Wolfgang Lück (ed.), Lexikon der Betriebswirtschaft , 2004, p. 105
- ↑ Werner Gladen, Performance Measurement , 2005, p. 61
- ↑ Ute Arentzen / Eggert Winter, Gabler Wirtschafts-Lexikon , 1997, p. 691
- ↑ Jünemann, Monoststruktur , in: Heinz M. Hiersig (Ed.), VDI-Lexikon Maschinenbau , Volume II, 1995, p. 821
- ↑ David J. Teece, Economies of Scope and the Scope of the Firm , in: Journal of Economic Behavior and Organization vol. 3, 1980, p. 224
- ↑ Ralph Wagner, The Limits of the Enterprise: Contributions to the Economic Theory of the Enterprise , 1994, p. 107