Economy of
scope is the average cost of company decreases when there is a variety of goods
produced. We can take example of different of company which are present in the
market. This companies deal with different product.
If we take
example of Samsung company. When they first launches themselves they are known
for their mobiles. They first launches mobile phone in Korean market. In the beginning
they were not that good in revenue. Because the most of the market share is
under Motorola.
Later Samsung
started investing in television and other appliances such as refrigerator, ac
etc. which make them a big tech giant in the global market.
Since the
cost of operating manufacturing building is spread out across various product,
the average total cost decreases. The cost
of producing each electronic device in another building would be greater than
just using a single manufacturing unit.
No comments:
Post a Comment