Assignment:
- Porter’s essential tests
- Attractiveness tests: is it attractive
- Entry cost tests: is it costly to build up?
- Better-off tests:
- It is not the diversified business that is being made better off by the presence of its core business, but the reverse: by encouraging the adoption of e-readers and ensuring that they are compatible with Amazon’s format for the electronic versions of its books.
- Hence, the source of this synergy is not the usual economies of scope in resources and capabilities. it is demand side economies of scope: books and e-readers are complementary products from the customers’ point of view.
Textbook link:
