Paul Mason's firm sells medical equipment to heart surgeons. The company fields a direct sales force that travels the country demonstrating its equipment to heart surgeons and hospital administrators. Recently, Paul's company started producing equipment for eye surgeons, partly to maximize the value of his sales force, which can now call on both heart surgeons and eye surgeons when it makes hospital visits. Paul's firm is attempting to capture economies of ________ through this strategy.

Question

Quizplus · Accepted Answer

Economies of scope refer to the cost savings that come from leveraging existing resources, such as a sales force, to sell multiple products or services. By expanding into equipment for eye surgeons in addition to heart surgeons, Paul's company is aiming to capture economies of scope by using its existing sales force to sell to a wider range of customers.

Paul Mason's Firm Sells Medical Equipment to Heart Surgeons