Week 2 Discussion - Economies of Scale and Scope
Context
The focus of this discussion is on understanding the differences between economies of scale and economies of scope. What are the key differences? Use these concepts to determine whether gains from economies of scale or gains from economies of scope were the principal reason behind a merger, acquisition, or divestiture.
Also, see the help provided in the discussion preparation.
Instructions
Select one of the mergers, acquisitions, or divestitures below. Consider whether the deal was about scope or scale economies.
- Merger of ExxonMobil and Pioneer Natural Resource.
- Goldman Sachs Retreats from Consumer Banking.
- Merger of theme parks Six Flags and Cedar Fair.
Post a Response
For your chosen case, address the following in your discussion post:
- Explain how economies of scale and scope differ.
- In the case you selected were the benefits of the deal created by economy of scope or scale?