The paper "Problem Solving in Business - Microsoft vs Disney Diversification" is a perfect example of a business assignment. An economy of scale is defined as the pricing edge a company gains as a result of expanding its business. Gaining economies of scale means that a firm would have gained an advantage in costs over its competitor, making it to achieve efficiency in its products. Technological changes, for example, could alter costs making businesses penetrate into the existing markets resulting in economies of Scale. This would precipitate a cost reduction. For example, a retail store acquiring 4,000 bags of sugar as opposed to around 200 bags, would cost low.
This means that the marginal prices for delivering 4,000 bags will be lower compared to acquiring 200 bags. Economies of Scope on the other end are the aspects which make the production of a variety of products to be cheaper compared to the production of individual products. A firm that produces a wide variety of products instead of specialized goods of a certain product gains economies of scope. For example, a firm could diversify the range of its products in a bid to gain an advantage of its existing brand values.
This is the exploitation of economies of scope. Question 2 A growing economy needs critical entrepreneurship elements portrayed by the Indian families in the Havells case. The business leadership developed environments that are conducive to entrepreneurial behavior. In the Havellscase, the families do not encounter differences in each of their member’ s opinions. Mr. Gupta has asserted this. In essence, there is no typical problem or friction brought by the younger generation to the established family business.
Unlike what many people would do, Mr. Gupta is still very aware of the business’ s happenings and this is attributed to his leadership skills, temperance, and his father’ s willingness to be adaptable in ways of thinking (Dasari, 2009). The leadership displayed by the family means that they are able to foresee and set future ambitions by adopting specified agreed plans. Havells has laid a plan to acquire a lighting firm from China and considered a number of other firms for similar reasons (Dasari, 2009).
Dasari, S. (2009). Havells India: The Sylvania Acquisition Decision. Canada: Ivey Management