Efficiencies formed by variety of products or services offered
Economies of scope are "efficiencies formed by variety, not volume" (the latter concept is "economies of scale").[1] In economics, "economies" is synonymous with cost savings and "scope" is synonymous with broadening production/services through diversified products. Economies of scope is an economic theory stating that average total cost of production decrease as a result of increasing the number of different goods produced.[2] For example, a gas station that sells gasoline can sell soda, milk, baked goods, etc. through their customer service representatives and thus gasoline companies achieve economies of scope.[2] The business historian Alfred Chandler argued that economies of scope contributed to the rise of American business corporations during the 20th century.[3]
^Joel D. Goldhar; Mariann Jelinek (November 1983). "Plan for Economies of Scope". Harvard Business Review. Retrieved 8 May 2020.
^ ab"Economies of scale and scope". The Economist. 20 October 2008.
^Chandler, Alfred Dupont (2004). Scale and scope: the dynamics of industrial capitalism (7. print ed.). Cambridge: Belknap Press of Harvard Univ. Press. ISBN 978-0674789951.
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