Experience curve/experience curve/experience curved line effect/experience effect

It is seen in many industries, "cumulative production volume of the identical product increases following, the curved line which shows the pattern that entire cost per unit keeps decreasing in fixed ratio". This effect is called the "experience curved line effect" the "experience effect". Whenever generally, cumulative production volume redoubles, it assumes that, unit cost slumps 20 - 30% at a time, but the ratio (skill ratio), it differs depending upon industry and the product.

When in the horizontal shaft it is displayed cumulative production volume, in the graph which takes unit cost in vertical axis, plots in the usual linear axis it becomes curved line of the right going down which if the curve is done in the downward look and plots in the logarithm axis it is shown in the straight line of the right going down. It is possible in the future to estimate cost by the map doing past statistic.
Example of the experience curved line by the linear axis

Example of the experience curved line by the logarithm axis

As for this pattern, it was discovered as the universal phenomenon which is seen at many industries the American strategic consulting company, the Boston consulting group (BCG) by on the sixties. The same company at the beginning learning curve (the effect) with explained this and did uninformed, but because then there is an explanatory difficult phenomenon, "accumulation of the experience which produces the same product bears the difference of entire cost," that it interpreted, it announced in 1966 as a new concept.

Experience curved line is not the theoretical model, in the tendency which is deduced from the observation and the actual data of various industries, the mechanism is not clear. Blues D ?????? of BCG which is the advocate (Bruce D. Henderson) study, specialization, scale and investment etc. are listed as a primary factor of experience curved line, as for the experience curved line effect while to make those connect, "as for the fundamental mechanism which bears the experience curved line effect, are not explained still sufficiently", also you have expressed.

When you follow this concept, if cumulative production volume is designated as 2 times vis-a-vis competitive enterprise, it means to be able to maintain cost competitiveness. And cost competitiveness quite is important as a competitive primary factor, at the same time as for the experience curved line effect they are not spontaneous ones and from the fact that effort of enterprise is necessary, as for BCG as for enterprise to the experience curved line effect should invest, when, it concluded.

Namely, leading other companies, doing investment positively, production volume activity by the fact that it increases, building cost predominance, it is the business strategy which guarantees the profit which increases market share, is high. In the product which has the especially mass production effect, it is required that early market share is guaranteed even in order to detach other companies.

This way BCG cost competitiveness (profitability) with showed the related characteristic of market share with the concept of experience curved line, but this developing, PPM which uses market share as alternate index of fund supplyabilitywas produced.