What technological changes enable successful use of economies of scope and what are the strategic implications for firms? Give some examples of exploited economies of scope.
When the company can produce goods at lower cost per unit by producing at least two products and achieving that lower cost per unit cost would not have been possible if it produced only one product, the phenomenon is referred to as economies of scope. Studies related to leading-edge production technology are increasingly gaining significance in understanding the competitive cost position of companies as application of these technologies can exploit the economies of scope.
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