Author Question: According to Chapter 13, business success doesn't always scale. What is meant by this statement? ... (Read 57 times)

ap345 · **on:** Jul 6, 2018

According to Chapter 13, business success doesn't always scale. What is meant by this statement?

What will be an ideal response?

Question 2

________ are an estimate of a firm's future income and expenses, based on its past performance, its current circumstances, and its future plans.

A) Calculation statements
B) Forecasts
C) Statements of cash flow
D) Financial statements
E) Prediction statements

Kaytorgator · **Reply #1 on:** Jul 6, 2018

Answer to Question 1

Scaling a business means increasing its size and pace of activity. Unfortunately, the very thing that makes a business initially successful often makes it difficult to grow or scale. For example, businesses that are based on providing high levels of individualized service often don't grow or scale well. This is because it's hard to continue to offer individualized service as a business grows. There is also a category of businesses that sell high-end or specialty products that earn high margins. These businesses typically sell their products where customers prioritize quality over price. These businesses can grow, but only at a measured pace. If they grow too quickly, they can lose the exclusivity they are trying to project or can damage their special appeal. For example, fashion clothing boutiques often limit the number of garments they sell in a certain size or color. Even though they know they could sell more of a particular tie or dress, they deliberately limit their sales so their customers don't see each other wearing identical items.

Answer to Question 2

B