## Answers

This type of diversification is unlikely to help companies take advantage of the savings to the extent that outside investors can not do business on their own. To benefit from the scope savings, the newly acquired company must be linked to the existing entity in the acquired company portfolio. This chapter discusses several ways to get a scale economy - operational economy, financial economy, and others. Unless the newly acquired entity has a relationship with the rest of the organization (which will require a change in it), the company will not be able to realize the scope savings in a way that shareholders can do on their own.

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