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Handbook Utility Management pp 55–72Cite as

Diversification and the Achievement of Scope Economies

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Abstract

The utility industry is undergoing major regulatory changes, freeing up a competition between alternative business models. Diversification marks one of the main themes in this struggle for success. The question of how companies can add value by engaging in multiple businesses inevitably relates to the concept of economies of scope. This chapter introduces the concept as a rationale for diversification, highlights its practical limitations, and discusses whether it explains the exhibited diversification trends within the utility industry. The chapter concludes by supporting the relevance of the concept for explaining diversification in general and the trends within the utility industry in particular.

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Author information

Authors and Affiliations

  1. Research Associate of Management and Organization, University of St. Gallen, Gallen, Switzerland

    Markus Schimmer

  2. Research Associate of Management and Organization, University of St. Gallen, Gallen, Switzerland

    Günter Müller-Stewens

Authors
  1. Markus Schimmer
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  2. Günter Müller-Stewens
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Editor information

Editors and Affiliations

  1. School of Humanities and Social Sc., Dept. Strategic Management and, International University of Bremen, Campus Ring 1, Bremen, 28759, Germany

    Andreas Bausch

  2. Roland Berger Strategy Consultants GmbH, Am Sandtorkai 41, Hamburg, 20457, Germany

    Burkhard Schwenker

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Schimmer, M., Müller-Stewens, G. (2008). Diversification and the Achievement of Scope Economies. In: Bausch, A., Schwenker, B. (eds) Handbook Utility Management. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-79349-6_4

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