ABSTRACT
The scale economy focuses on volume and the reduction of costs by creating large volumes of products. The scope economy focuses on the particular needs of customers. For example, in the shipping industry a chemical tanker is a typical example of the scope economy. In the beginning, container transportation was a scope-oriented business. Today, there is also a container market in the scale economy. Therefore, the size of container ships has grown rapidly in the last ten years. There are two outcomes from the scale-scope trade-off. First, the scale economy is correlated with the market share of a company. Since a scale strategy requires a massive shipping fleet, scale-oriented shipping makes up a big portion of the shipping pie. On the other hand, scope-focused shipowners have a relatively small market share in the shipping business. The level of specialization defines the uniqueness, and more unique shipping creates higher returns.
