|Overview: Economies Of Scope|
|Definition||Efficiencies gained by variety such as a wide product offering.|
|Related Concepts||Economies Of ScaleEconomies Of Density|
What are Economies Of Scope?
John Spacey, November 19, 2015
Economies of scope is efficiency gained by variety. It is often compared to economies of scale, or efficiency gained by large-scale operations.The benefits of economies of scope include reduced cost, less risk due to a diversified product offering and higher visibility in the market. For example, a car manufacturer can share brand, reputation, technologies and its network of sales locations amongst its models. Economies of scope are also related to customer preferences for a wide selection. For example, a well stocked supermarket offering a wide variety of items may be viewed as a one stop shop by customers that allows them to complete a variety of purchases in one place.
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