2) Economy of scope
Economy of scope primarily refers
to efficiencies associated with demandsided
changes such as increasing or
decreasing scope of marketing and
distribution. Regarding the economy of
scope, Olive Nine is established in order to
produce TV programs, but it extends its
business scope to other media services
such as performer management, Theme
Park and brand merchandising. Therefore,
the cost that Olive Nine spends is not
allocated to only TV drama. But, it is shared
among several services that Olive Nine provides which cause the higher
distributing and marketing efficiency and
create the synergy between the completed
rang of products. So, the overall cost of
Olive Nine can be reduced. In business
term, Olive Nine utilizes the Economy of
Scope.