experience curve

Relationship between unit costs and cumulative production. As cumulative production increases, productivity costs decline. This effect is ascribed to the fact that, the more often processes are repeated, the better workers become at their jobs, and therefore, the smoother processes run within the organization. This means that, in theory, the faster production capacity is increased, the quicker competitive advantage can be obtained.

The concept was extended to corporate strategy by Bruce Henderson, founder of US management consultants the Boston Consulting Group.