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Week 2 Discussion
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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?
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.
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Week 2 discussion top of form· 1· 2· 3· 4· 5· 1

  • 1. Week 2 Discussion Top of Form · 1 · 2 · 3 · 4 · 5 · 1 · 2 · 3 · 4 · 5 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?
  • 2. · The merger of Strayer University and Capella University to form SEI, was this about scope or scale economies? 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. Bottom of Form