Heirloom Furniture is a brand reputed for its wide variants of sofas that introduced a new range of mattresses and bed frames a few years ago. Since most of its products could be produced using the same resources and technology, the company's cost structure lowered, while its product portfolio widened. In this scenario, which of the following value and cost drivers is Heirloom applying?

Question

Quizplus · Accepted Answer

Heirloom is applying the strategy of economies of scope in this scenario. The concept economies of scope describes the savings that come from producing two (or more) outputs at less cost than producing each output individually, even though using the same resources and technology.

Heirloom Furniture Is a Brand Reputed for Its Wide Variants