Via PriSim: Chasing Growth Can Turn a For-Profit Company into a No-Profit

business-failureIt seems many companies today are chasing growth. As an example, Amazon invests most of its cash into growing the company. The goal is to solidify a position in the market first and earn money on the investment later. But according to Amazon CEO Jeff Bezos, he was up-front with his investors regarding his plans to create growth in the company. Knowing that, Bezos says, his investors are fine with waiting.

However, Amazon’s strategy doesn’t work for everyone. Nine years after acquiring YouTube, Google still hasn’t found a path to profitability for the video-sharing platform. YouTube only just manages to “break even”; its audience is relatively narrow in spite of the huge number of hits the site gets.

Growth is nice, but will investors wait forever for growth to turn into profits? It’s doubtful. Most companies that chase growth at the expense of profit end up failing. Amazon is a rare exception.

PriSim_Logo

 

PriSim Business War Games Inc. runs and designs customized business simulations that teach decision-makers about business, strategy, finance, and leadership.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s