First of all let us see why every company wants to grow itself. There can be many answers to this question which are given below.
As the company grows, the manufacturing cost of the product decreases, due to which profits increase. If your manufacturing cost is low, then you can attract more customers by keeping the price of your product low.
Suppose you are running an ice cream factory, in which it takes 5 rupees to make each ice cream. The freezer you use to freeze the ice cream costs Rs 5000.
In this way, if you make 100 ice creams, it will cost you 55 rupees to make one ice cream. But if you make 1000 ice creams then the cost of making one ice cream will be only 10 rupees. In this way you can increase your profits by reducing your manufacturing cost.
Managers want to grow their company and earn maximum profit. Because they feel that growing the company can increase their profits, so they keep on expanding their company. But does it really happen? Let’s see.
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