Related Diversification: Economies of

Scope
and Revenue
Enhancement
Related Diversification a firm entering a
different business which it can benefit from
leveraging core competencies, sharing
activities, or building market power.

Economies of Scope refers cost savings

from leveraging core competencies or
sharing related activities among
businesses in a corporation.

Related Diversification: Economies of

Scope
and Revenue
Enhancement
The two basic operations-related economies
through which companies can create value
(from economies of scope) are by leveraging
core competencies and sharing activities.

Related Diversification: Economies of

Scope
and Revenue
Enhancement
Core Competencies combination of
collective learning and technical
capacities that allow a business to
be competitive in the marketplace.
- Engine that fuels new business
growth.

Related Diversification: Economies of

Scope
and Revenue
Enhancement
Sharing Activities having activities of two or
more businesses value chains done by one
of the businesses.
-common manufacturing facilities
-Distribution channels
-sales forces

 Sharing Activities provide Pay-offs

-cost saving
-revenue enhancement