“Growth for the sake of growth is the ideology of cancer cells.” - Edward Abbey
“Organizations, therefore, must seek and learn to grow profitably”
Gain market share and profitability will follow – was the thumb-rule for most of the industries in the old economy. However, in the last 20 years, the strong correlation between market share leadership and superior profitability has collapsed. We have seen multiple examples of companies, worldwide, with high market share and revenue growth but no profitability. Market share leaders? YES. High revenue growth? YES. Profitable? NO.
The blind pursuit of growth has taken many companies in the “NO PROFIT ZONES”. Therefore, any effort to grow revenues or gain market share must be preceded by a serious “customer selection” process [which customers do I serve and more importantly, which ones do I not serve] and must be accompanied by the execution of the various levers available to improve profitability, simultaneously.
Reference: Profit Zone by Adrian J. Slywotzky and David J. Morrison