Week 2 discussion contextfirms seek growth. one source of

1. Week 2 Discussion
Context:
Firms seek growth. One source of growth is external growth
from a merger or acquisition. Often mergers or acquisitions are
justified on the basis of the expected benefits from
"synergies" created by the merger of acquisition. Economists
know these "synergies" as economies of scale and economies of
scope. There is almost always in a merger or acquisition one of
these forces which is the predominate force.
The focus of this discussion will be on understanding the
difference between economies of scale and economies of
scope. What are the key differences? Use these concepts to
determine whether gains from economies of scale
or
the gains from economies of scope was the principle reason
behind the merger or acquisition.
The Assignment:
Select one of the mergers or acquisitions below:
Sirius XM acquired Pandora, was this about scope or scale
economies?
The merger of Sprint, T-Mobile and Metro PCS, was this about
scope or scale economies?
The merger of Strayer University and Capella University to
form SEI, was this about scope or scale economies?

2. Make sure you explain how economies of scale and scope
differ.
Describe how growth in the case you select is created from
either an economy of scope or scale
.
Note: In your discussion posts for this course, do not use
Wikipedia, Investopedia or any similar websites as reference
supporting your conclusions. Use of these in any form or to any
extent taints all content. They should never be used in any
professional writing.
To earn full credit you must post at least one direct post with
your conclusion and at least one follow-up post as a reply to
another post. Make sure both posts focus on the questions
under discussion.