What is Economies of Scope?
A definition of Economies of Scope
“Economies of scope occur when a company can produce multiple products more cheaply in combination than separately, leading to cost efficiency.”

Business Glossary > What is Economies of Scope?
Examples of Economies of Scope in a Sentence:
The company achieved economies of scope by jointly producing its new line of cosmetics and its existing range of skincare products.
Diversifying their product range allowed the firm to capitalize on economies of scope.
To gain economies of scope, businesses often expand into related markets.
Why is Economies of Scope Important in Business?
Understanding economies of scope helps businesses enhance cost efficiency and competitive advantage by diversifying their product offerings. It enables firms to maximize resource utility and increase profitability through strategic synergy in operations.
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Associated Terms
Here are some associated business terms and synonyms for “Economies of Scope”:
- Operational Synergy
- Synergistic Benefits
- Scope Efficiency
Procter & Gamble Economies of Scope
Procter & Gamble, a multinational consumer goods company, utilizes economies of scope by leveraging their research, production, and marketing capabilities across a diverse product range, including household cleaning supplies, beauty products, and health care items, thereby lowering overall costs and enhancing profitability.
Final Notes on Economies of Scope
When considering economies of scope, businesses should evaluate their capacity to efficiently integrate and manage diverse product lines. Strategic planning is essential to ensure the anticipated cost savings and operational advantages are realized.
This has been a definition of Economies of Scope meaning.
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