Please answer the following questions thoroughly and be simple and concise. The subject matter at hand is economies of scale and economies of scope. Please use microeconomics terms and concepts to answer the 2 questions. Each answer should be lengthy, please elaborate and give examples if required.
1) Using the examples in the following article, explain how firms create competitive advantage utilizing economies of scale and economies of scope. Provide other real life examples to support your answer.
The Big, The Bad and the Beautiful http://www.strategy-business.com/article/03402?pg=all (Links to an external site.)
2) Also, explain why Webvan was not successful in its scaling efforts? Use the economies of scale and elasticity concepts in your answers.
https://techcrunch.com/2013/09/27/why-webvan-failed-and-how-home-delivery-2-0-is-addressing-the-problems/ (Links to an external site.)
Attached is also a video of the textbook my class uses the topics of economies of scale and economies of scope at around the 40 minute mark:
This video will not answer these questions but is an outside source that you may or may not find helpful. Please look up the concepts or terms if you are unsure and feel free to ask me.