ECONOMIES OF SCOPE Flashcards
1
Q
What is economies of scope
A
Economies of scope are the benefits to a business that arise from producing a range of products.
2
Q
When does economies of scope occur
A
The same production facilities can be used
The same staff can be utilised
An organisation’s technology can be used
The same distribution networks can be exploited
The same raw materials are required
3
Q
What are the benefits of economies of scope
A
More efficient use of resources, leading to lower average costs
Increase revenues and the number of revenue streams
Increase customer satisfaction
Improve brand image and awareness
Spreads risk across a range of markets
