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Topic: Economies of scope

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  Economies of scope - Wikipedia, the free encyclopedia
Economies of scope are conceptually similar to economies of scale.
Economies of scope are one of the main reasons for such marketing strategies as product bundling, product lining, and family branding.
Not all economists agree on the importance of economies of scope.
en.wikipedia.org /wiki/Economies_of_scope   (378 words)

 Economies of Scope
Economies of scope differ from economies of scale in that the enterprise enjoys a cost advantage from manufacturing generally limited quantities of a variety of products based on a core expertise, rather than concentrating that core expertise on manufacturing large quantities of one product.
Economies of scope have been realized in a number of industries, including telecommunications and the health-care industry.
Economies of scope achieve this, however, not through increases in the scale of manufacturing apparatus, but through increases in the scope of those applications into related fields.
www.referenceforbusiness.com /encyclopedia/Eco-Ent/Economies-of-Scope.html   (889 words)

 Economies of Scope
Economies of scope exist if the firm reduces costs by increasing the variety of activities it performs.
Whereas economies of scale are usually defined in terms of declining average cost functions, it is more customary to define economies of scope in terms of the relative total cost of producing a variety of goods together in one firm versus separately in two or more firms.
Economies of scope may be achieved by leveraging core competencies.
faculty.msb.edu /homak/HomaHelpSite/WebHelp/Economies_of_Scope.htm   (113 words)

Economies of scope are cost advantages that result when firms provide a variety of products rather than specializing in the production or delivery of a single output.
Economies of scope also exist if a firm can produce a given level of output of each product line more cheaply than a combination of separate firms, each producing a single product at the given output level.
Economies of scope often result from a related diversification strategy and may even be termed "economies of diversification." This strategy is operationalized when a firm builds upon or extends existing capabilities, resources, or areas of expertise for greater competitiveness.
www.referenceforbusiness.com /small/Di-Eq/Economies-of-Scope.html   (698 words)

 Economies of Scale vs Economies of Scope - 20/20 Network   (Site not responding. Last check: 2007-10-11)
Economies of scale require production to be centralized; economies of scope require production to be distributed in space or across a spectrum of products.
Falling computer communications costs and the economies of scope to be found in the distributed systems they make possible, will ensure that disinteremediation will spread to all industrial sectors and to the government sector including education and health.
The economies come because DTE avoids the expense and delays of regulation (gas turbines and fuel cells are exempt) and the capital and operating costs of power generation and doesn't have to worry about clean air regulations or carbon gas emissions.
www.2020network.ca /index.php/Economies_of_Scale_vs_Economies_of_Scope   (1416 words)

 The Great Communications Race: Economic Forces: CommsUpdate : TeleGeography Research
Economies of scope occur when it is less costly to produce two or more products together than separately.
Economies of scope provide the glue that keeps most multi-product businesses together; economies of scope explain why there are no canned soup stores or telephone companies that limit service to call forwarding.
Economies of scale are similar to economies of scope except that the cost advantage is the consequence of producing more of the same product.
www.telegeography.com /cu/article.php?article_id=191   (2163 words)

 Ross Mayfield's Weblog
Economies of speed are achieved by using an asset to produce outputs at a higher rate of throughput.
Economies of scope are achieved by using an asset to produce different types of outputs.
Economies of span are achieved by efficient coordination, or sequenced use, of assets.
radio.weblogs.com /0114726/2002/10/21.html   (399 words)

 Returns to scale - Wikipedia, the free encyclopedia
Economies of scale and diseconomies of scale refer to an economic property of production that affects cost if quantity of all input factors are increased by some amount.
Economies of scale tend to occur in industries with high capital costs in which those costs can be distributed across a large number of units of production (both in absolute terms, and, especially, relative to the size of the market).
Network externalities resemble economies of scale, but they are not considered such because they are a function of the number of users of a good or service in an industry, not of the production efficiency within a business.
en.wikipedia.org /wiki/Economies_of_Scale   (849 words)

 Economies of Scope -- A complete definition
Economies of scope is a term that refers to the reduction of per-unit costs through the production of a wider variety of goods or services.
Similar to economies of scale, economies of scope provide companies with a means to generate operational efficiencies.
However, economies of scope are often obtained by producing small batches of many items (as opposed to producing large batches of just a few items).
www.streetauthority.com /terms/e/economies-of-scope.asp   (624 words)

 Economies of scope
Whereas economies of scale apply to efficiencies associated with increasing or decreasing the scale of production, economies of scope refer to efficiencies associated with increasing or deceasing the scope of marketing and distribution.
Whereas economies of scale refer to changes in the output of a single product type, economies of scope refer to changes in the number of different types of products.
Whereas economies of scale refer primarily to supply-side changes (such as level of production), economies of scope refer to demand-side changes (such as marketing and distribution).
www.fastload.org /ec/Economies_of_scope.html   (363 words)

 Economies Of Scale
Typically, a company that achieves economies of scale lowers the average cost per unit through increased production since fixed costs are shared over an increased number of goods.
External economies - the cost per unit depends on the size of the industry, not the firm.
Economies of scale gives big companies access to a larger market by allowing them to operate with greater geographical reach.
www.investopedia.com /terms/e/economiesofscale.asp   (359 words)

 Scale and Scope Effects on Advertising Agency Costs
Economies of scale are evident when a firm’s average costs decline while its output expands, as when an advertising agency raises its gross income by serving more accounts and/or larger accounts.
Economies of scope appear when cost savings can be realized by a single agency producing several products jointly, as compared to many agencies each producing them separately.
Finally, our findings demonstrating the existence of scale and scope economies are consistent with the diminishing reliance on fixed rates of media commissions as the principal basis of agency compensation.
www.marketingscience.org /abstracts/vol12/no1/silkandberndt.html   (394 words)

 Economies of Scale and Scope
However, the existence of substantial economies of scale for producing telephone terminal equipment was doubtful and when that market was deregulated, the successful entry of a variety of suppliers marked the first step toward disintegration of the broader monopoly of network infrastructure.
Economies of scope and scale lead firms to integrate "vertically" in two separate dimensions--over two or more service layers (transport, switching, and provision of information services) and over hierarchical levels of network switching and control (local, long-distance, and international service).
Economies of scope in the provision of electronic messaging services suggest that providers may offer a range of messaging alternatives.
www.nd.edu /~mgrecon/datafiles/articles/scopescaleeconomies.html   (12923 words)

 Boxes without Windows
There are economies of scale when the average cost falls as the number of units produced increases.
Economies of scope refer to the average cost of producing two different goods.
There are economies of scope (in this context) when the average cost of providing two functions in one product is less than the cost of providing those functions in separate products.
arnoldkling.com /~arnoldsk/boxes.htm   (1245 words)

 Thoughts on Scale, Scope and Bureaucracy
From the producer's perspective, economies of scope might consist of using knowledge and experience gained in designing and selling one product to venture into a related area.
Economies of scale are on an upward trend, because of reduced costs of managing operations and dealing with customers from far away.
Economies of scope are on a downtrend, or at least not trending upward as rapidly as economies of scale.
arnoldkling.com /~arnoldsk/scale.htm   (1554 words)

 Essential Economics: Economies of Scale and Scope
And the nature of economies of scale and scope can change the structure of competition in an industry over time as well as the profitability of supplying to consumers.
External economies of scale occur when an industry's scope of operations expand due to for example the creation of a better transportation network, resulting in a subsequent decrease in cost for a company working within that industry, external economies of scale are said to have been achieved.
Economies of scope occur where it is cheaper to produce a wider range of products rather than specialize in just a handful of products.
www.tutor2u.net /economics/content/essentials/economies_scale_scope.htm   (1123 words)

 Tutor2u - Economies of Scope
Economies of scope are changes in average costs because of changes in the
In the publishing industry, there might be substantial cost savings from using a team of journalists to produce more than one magazine.
economies of scope occur when there are cost-savings arising from
www.tutor2u.net /economics/content/topics/buseconomics/economies_of_scope.htm   (246 words)

 Economies of Scope
Such corporations extend expertise in core competencies or technologies to the full range of products related to those core competencies or technologies.
The core competency of GM rests in the development and fabrication of products powered by gasoline- or diesel fueled engines.
General Electric also achieved significant economies of scope around turbine engine technology, providing the company with significant positions in power-generating equipment, nuclear power, and jet engines.
referenceforbusiness.com /encyclopedia/Eco-Ent/Economies-of-Scope.html   (889 words)

 Ross Mayfield's Weblog
Economies of Speed, Scale and Span produce increasing marginal returns that can be linearly projected.
Economies of Scope, however, produce increasing marginal returns that are non-linear.
A Real Options methodology would be more suitable for measuring the value of a technology asset that realizes Economies of Scope.
radio.weblogs.com /0114726/2002/10/22.html   (702 words)

 Glossary E
(1) the economies of regions (as aggregates of interrelated economic activities) "The economy of Seattle"
The advantages accruing to a producer with many plants of different sizes in allocating increases or decreases in operations to that plant whose size is such as to handle the total output change of the producer most efficiently.
Those scale economies "which flow from the fact that (the firm) is large, employing numbers of workers, with a large management, buying materials...
faculty.washington.edu /krumme/gloss/e.html   (1960 words)

 Modelling Economies of Scope
Economies of scope arise from synergies in the production of similar goods.
Specifically, we show that the applicability of the joint public input explanation is essentially characterized by the property that synergies are decreasing as the scope of production increases; we also argue that the latter property of "substitutive" synergies represents the normal case.
This leads to a structured repertoire of models of economies of scope, among which we determine a privileged subclass that combines flexibility with reduction of complexity and interpretability.
ideas.repec.org /p/bon/bonsfa/607.html   (314 words)

 SSRN-Economies of Scope and Patterns of Global Outsourcing by Zhihao Yu
This paper presents a model in which economies of scope in production play a key role in a vertically-linked production structure.
It identifies the divergence in the degrees of economies of scope and the attribute spaces of the products in different stages of production as a fundamental economic force behind outsourcing.
Yu, Zhihao, "Economies of Scope and Patterns of Global Outsourcing".
papers.ssrn.com /sol3/papers.cfm?abstract_id=764486   (203 words)

 The Horizontal Boundaries of the Firm: Economies of Scale and Scope   (Site not responding. Last check: 2007-10-11)
Short-run Economies of Scale: reductions in unit cost attributable to spreading fixed costs for a plant of a given size.
Long-run Economies of Scale: reductions in unit costs attributable to a firm switching from a low fixed/high variable cost plant to a high fixed/low variable cost plant.
Marketing Economies: 1) economies of scale due to spreading advertising expenditures over larger markets and 2) economies of scope due to building a reputation of one product in the product line benefiting other products as well.
www.louisville.edu /~bmhawo01/econpage/600/homework/chapter2summary.htm   (1139 words)

 Economies of Scope in European Railways: An Efficiency Analysis
Economies of Scope in European Railways: An Efficiency Analysis
In this paper, we conduct a pan-European analysis to investigate the performance of European railways with a particular focus on economies of vertical integration.
"Economies of Scope in European Railways: An Efficiency Analysis," Working Paper Series in Economics 29, University of Lüneburg, Institute of Economics.
ideas.repec.org /p/iwh/dispap/5-06.html   (444 words)

 Enterprise .NET Community: Software Factories: Refactoring an Industry
Economies of scale occur when the initial development of a design and subsequent construction of a prototype result in multiple copies of that prototype are created.
Economies of scope occur when multiple similar, but unique designs are produced in groups, as opposed to individually.
Greenfield et.al point out that for years, the IT industry has been trying to apply economies of scale for achieving reuse, when in fact, the IT industry should have been trying to apply economies of scope to achieve reuse.
www.theserverside.net /articles/showarticle.tss?id=SFRefactoringIndustry   (2363 words)

 SSRN-Economies of Scope, Financial Intermediation, and Innovation by George Kanatas, Jianping Qi
We study a two-period model in which informational economies of scope that provide a cost advantage to universal banks offering "one-stop" shopping also enable these intermediaries to "lock in" their clients with switching costs that would be incurred if they changed intermediaries.
This in turn prevents universal banks from using scope economies to completely dominate the market for financial services.
Kanatas, George and Qi, Jianping, "Economies of Scope, Financial Intermediation, and Innovation" (May 24, 2000).
papers.ssrn.com /sol3/papers.cfm?abstract_id=233752   (318 words)

 economies of scope (English to French translation glossary) Sociologogy,Philosophy,Art/Literary
economies of scope (English to French translation glossary) Sociologogy,Philosophy,Art/Literary
This is the crucial material factor in the whole process: the micro-electronic revolution offering a productivity leap in the production of the desired "economies of scope" (rather than economies of scale).
Le concept «d'économies de champ» ou «d'envergure» (economies of scope) apporte un...
www.proz.com /kudoz/1589766   (210 words)

 Review Questions for Exam 2
Economies of scale, Economies of scope, Learning curve
Economies of scale exist when the firm's _____ curve is downward sloping.
Since this is positive, we can tell that there are economies of scope.
www.uncp.edu /home/frederick/MBA515/exam2rev.htm   (967 words)

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