On a traditional and maybe not so even playing field, small businesses are not capable of competing with larger, more established industrial players. They do not possess the resources to take the same kind of large-scale actions – bulk purchases, to give a simple example. This is why they are on the losing end of any competition that requires scaling, such as a price war.
Amazon.com is a good example. Look at the way that they manage to undercut traditional bookstores. This is due to their ability to survive on thinner profit margins and optimize their activities, from their shipping processes to the ways that they hold stock at their warehouses, economy of scale as such.
However, if we think back to the beginning, Amazon started small (more specifically, one-man-in-his-garage small), which is pretty small by anyone's standards. How do such companies manage to grow, and how can the small … Read More