Why Businesses Fail? S01E04

In some business, size does matter. The biggest companies struggle for growth. Even a single digit drop in growth percentage can result in a large drop in the stock price of listed companies. On the other hand, there are small, boutique firms that are highly specialized, operate within a niche, and have a loyal customer base. Rather than spending large sums on marketing and brand building, they focus on quality and growth by word of mouth. Are they doing something right by staying small and continuing to operate, or are they missing out on the multiple growth opportunities that exist? We ponder this question in this episode.

For a business leader, what should be the main focus, grow bigger, grow profitable, or attain sustainable growth? The answer may vary depending on the sector you operate in. A recent example may offer a clue.

In early 2022, one of the largest industrial conglomerates in India made an announcement that they would invest billions of Rupees (i.e. Hundreds of crores of Rupees) in the FMCG or Fast Moving Consumer Goods space. This prompted CXOs of some of the incumbent companies to announce they would make some acquisitions, enter new geographies, or product statements. The theme that resonated was – even in these current challenging times, they all aspire to grow bigger.