What would happen if a companies profits just stayed the same over a period of quarters? I obviously don’t understand it at all but isn’t it just unsustainable to expect growth indefinitely?
In: Economics
If you’re not growing, you’re dying. If a company stagnates and isn’t increasing their business and growing with the times, someone else doing the same thing you are doing is. And they will be better able to serve the customer base, and likely for cheaper. And that will put you out of business.
Say you make a Widget. You get your business up to a level that you like and then just stop growing. Then someone else comes along and makes the same Widget. They continue to grow and expand, making more Widgets than you and for a cheaper cost to make them, meaning they can sell them for cheaper than you can. They will eventually take over the market because people will be paying them less for the Widget than what they would be paying you, so they buy from them instead.
If you have a unique product or service, you can get away with little to no growth. But as soon as you have any real competition for customers, you will more likely than not find that competition taking over the market completely because they spent their money on improving their service and lowering their costs.
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