Question 1

What is the difference between economies of scale and economies of scope? How can a firm create economies of scope?

Accepted Answer

Compared to economies of scale,which are driven by producing more of a single product,economies of scope are realized when producing more than one product makes the production of all units in the assortment cheaper.Economies of scope exist whenever there are cost savings from using a resource in multiple activities carried out in combination rather than carrying out those activities independently.Firms can share tangible resources,share intangible resources,pool negotiating power,coordinate strategies among SBUs,implement vertical integration,and combine technologies.

Question 2

How would vertical integration most likely benefit a firm?

Accepted Answer

A)  reducing inventory costs 
B)  improving customer loyalty 
C)  enhancing brand awareness 
D)  facilitating personal selling methods 
A)  reducing inventory costs 
B)  improving customer loyalty 
C)  enhancing brand awareness 
D)  facilitating personal selling methods A

Question 3

A firm that uses a diversification strategy to sell a new product that is related to its core business would most likely benefit from ________.

Accepted Answer

A)  economies of scale 
B)  viral marketing 
C)  brand recognition 
D)  price protection 
A)  economies of scale 
B)  viral marketing 
C)  brand recognition 
D)  price protection C

Question 4

Economies of scope is a common reason for firms that pursue diversification strategies.

Accepted Answer

A) True 
 B)False

Question 5

________ occurs when two inputs act together and result in an output that is greater than the sum of the two inputs taken separately.

Accepted Answer

A)  Synergy 
B)  Indemnity 
C)  Reciprocity 
D)  Productivity 
A)  Synergy 
B)  Indemnity 
C)  Reciprocity 
D)  Productivity

Question 6

A firm can create economies of scope by using one manufacturing facility for a range of products.

Accepted Answer

A) True 
 B)False

Question 7

Producing a diverse number of products leads to economies of scale,and producing a high volume of products leads to economies of scope.

Accepted Answer

A) True 
 B)False

Question 8

Economies of scope exist when a firm saves money by ________.

Accepted Answer

A)  using a resource in multiple activities 
B)  assessing the customer value chain 
C)  merging with a smaller firm 
D)  selling products globally 
A)  using a resource in multiple activities 
B)  assessing the customer value chain 
C)  merging with a smaller firm 
D)  selling products globally

Question 9

Company X produces more than one product at its manufacturing facility,which lowers the firm's overall production costs.This is most likely an example of ________.

Accepted Answer

A)  economies of scale 
B)  economies of scope 
C)  market diversification 
D)  horizontal integration 
A)  economies of scale 
B)  economies of scope 
C)  market diversification 
D)  horizontal integration

Question 10

All of the following are methods for multi-business-unit companies to create economies of scope EXCEPT ________.

Accepted Answer

A)  sharing intellectual property 
B)  selling products to niche markets 
C)  coordinating market entry strategies 
D)  pooling negotiating powers for bulk discounts 
A)  sharing intellectual property 
B)  selling products to niche markets 
C)  coordinating market entry strategies 
D)  pooling negotiating powers for bulk discounts

Question 11

A firm that manufactures ________ would most likely gain an economy of scope.

Accepted Answer

A)  limited quantities of products 
B)  large numbers of products 
C)  many different products 
D)  one type of product 
A)  limited quantities of products 
B)  large numbers of products 
C)  many different products 
D)  one type of product

Question 12

Harvey Industries manufactures and sells fine wood furniture.The company uses the sawdust generated by the production of its furniture products to make particle board.The particle board is then used in the construction of inexpensive furniture that the firm sells in retail stores,such as Walmart.Which term best describes how the firm uses sawdust?

Accepted Answer

A)  horizontal brand extension 
B)  economies of scale 
C)  by-product synergy 
D)  product bundling 
A)  horizontal brand extension 
B)  economies of scale 
C)  by-product synergy 
D)  product bundling

Exam 12: Note : Economies of Scope-Synergies and Virtuous Circles

What is the difference between economies of scale and economies of scope? How can a firm create economies of scope?

How would vertical integration most likely benefit a firm?

A firm that uses a diversification strategy to sell a new product that is related to its core business would most likely benefit from ________.

Economies of scope is a common reason for firms that pursue diversification strategies.

________ occurs when two inputs act together and result in an output that is greater than the sum of the two inputs taken separately.

A firm can create economies of scope by using one manufacturing facility for a range of products.

Producing a diverse number of products leads to economies of scale,and producing a high volume of products leads to economies of scope.

Economies of scope exist when a firm saves money by ________.

Company X produces more than one product at its manufacturing facility,which lowers the firm's overall production costs.This is most likely an example of ________.

All of the following are methods for multi-business-unit companies to create economies of scope EXCEPT ________.

A firm that manufactures ________ would most likely gain an economy of scope.

Overview of Marketing Strategy the Strategic Marketing Process

Situation Assessment - the External Environment

Situation Assessment - the Company

Strategy Formation

Implementation

Planning,assessment,and Adjustment

Note : Market Definition

Note : Context: Pest Analysis

Note : Customer Assessment - Trends and Insights

Note : Consumer and Organizational Buyer Behavior

Note : Competitor Analysis - Competitive Intelligence

Note : Company Assessment - Missions and Visions

Note : Company Assessment - the Value Chain

Note : Industry Analysis

Note : the Product Life Cycle

Note : Experience Curve Effects on Cost Reduction

Note : Economies and Diseconomies of Scale

Note : Market-Share Effects

Note : Scenario Analysis

Note : the Marketing Concept

Note : What Is a Marketing Strategy

Note : Generic Strategies - Advantage and Scope

Note : Generic Strategies - the Value Map

Note : Generic Strategies - Product-Market Growth Strategies

Note : Specific Marketing Strategies

Note : Market Segmentation

Note : Loyalty-Based Marketing,customer Acquisition,and Customer Retention

Note : Customer Lifetime Value

Note : Competitive Advantages

Note : Swot Analysis

Note : Targeting

Note : Positioning

Note : Customer-Oriented Market Research

Note : Brands and Branding

Note : Products - New Product Development

Note : Products - Innovations

Note : Products - Product Portfolios

Note : Pricing Strategies

Note : Promotion and People - Integrated Marketing Communications

Note : Place - Distribution

Note : Budgets,forecasts,and Objectives

Note : Staircase Analysis

Note : Assessment and Adjustment

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