Every now and then (too often in my opinion) you hear managers of companies say: "We need scale, we need to expand to be profitable." This remark leads to a new acquisition (sales channel e.g.) or a merger.
This statement puzzles me. I understand what it says, but I tend to disagree with it. It sounds like: The Bigger the Better. We all know and experience this doesn't have to be true. It can be true. This statement simply implies that it is true. Or am I mistaken? Is this a statement that is economically and logically correct? Please tell me if I'm wrong.
So, I disagree with this statement (for now). And I think it tends to mask an underlying problem. Talking about scale moves a company away from thinking about vision. Why does our company exist? What are we good at? Who are our competitors? What do we want to be good at? Etc. When you have a sound vision, you can define a roadmap to get there. Being bigger (growing) could be a path towards the future, but it doesn't have to be.
I'd love to hear your thoughts.