Economies of scope
Etymology
From "economy" (Greek "oikonomia," household management) and "scope" (Greek "skopos," aim, range). The term was introduced by economists John Panzar and Robert Willig in 1981 as a deliberate counterpart to the older "economies of scale."
noun phrase · /ih-KON-uh-meez uv SKOHP/
Cost savings that come from producing a variety of different products together rather than separately.
What it names
Explains why one firm can profitably make many related things — shared inputs, skills, and infrastructure spread across a range.
Example
A dairy enjoys economies of scope by turning the same milk into cheese, butter, and yogurt on one site.
Related idea
Economies of scale lower cost by making more of the same thing; economies of scope lower it by making different things together.