Economies of integration: a new manufacturing focus
by Hamid Noori
International Journal of Technology Management (IJTM), Vol. 5, No. 5, 1990

Abstract: The need to respond to competition is becoming a dominant theme in the argument advocating new technology acquisition. Clearly, the choice of technology should be based on the complete manufacturing strategy of each company rather than being simply a defensive response. This paper discusses the technological characteristics of economies of scale and economies of scope, and maintains that there is potential with the new technology to realise both scope and scale economies simultaneously, making their relationship interdependent. Furthermore, while the paper does not purport to develop a fully theoretical basis, it contends that to focus on only one of the economies limits he potential strategic manufacturing options of the firm. Achieving both economies concurrently will prove to be a key competitive axiom in many industries in the future. This axiom is referred to as 'economies of integration'.

Online publication date: Mon, 25-May-2009

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