Can companies get to big to grow?

Upon working on a project about demand management I stumbled upon a concept I heard before but just briefly.

The notion that companies grow as such a rapid space that they outgrow themselves and in the end stagger the growth rate and won’t see any grow after that. The thought is daunting as we are very much told the importance to maintain a steady and sometimes even aggressive growth in order to gain market share.

Recently I was working for a company that faced just this issue. A small sized firm that was rapidly expanding in ways that inventory was a constant problem. The need for cash flow in order to meet the customers’ demands could have been devastating as the initial down payments to suppliers where in 000’s.

Fortunately cash flow where sorted out and demand could be met but it taught me a lesson within the problem space of cash flow and demand. Everyone wants to grow, but few have the liquidity to do so.

Harvard Business Review writes about this problem to, and could be worth checking out as an eye-opener. 

Leave a Reply

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

You are commenting using your 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