Growth company

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Growth company
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Growth company is a business which generates increasing earnings. The rate of increase should be faster than overall economy. Investors look for growth companies, because especially in the first phase of growth they can be profitable investment. However, when everyone on the market knows that the company is profitable, it is better to think twice before purchase - it can be worth less than market price.

Growth companies can be found more often in new technologies. If the company enters completely new market it can easily increase sales and rapidly grows. On older markets, where there are many competitors, it is very difficult to gain such an advantage. Today large companies look for future growth companies among start-ups. They are able to buy many start-ups cheap, before they grow. Even if some of them won't bring earnings, they will earn on others.

The most known growth companies are e.g. Tesla, Amazon, Apple, Alphabet.


Apple's impact on economics and culture competes with the most important companies in the United States. Apple is a company that creates standards. It's all thanks to their perception of technology and creation. By introducing upgrades to homes, Apple and Samsung make lawsuits. They became some kind of opponents. Investors and technologists are wondering how the Apple will maintain its position. Buyers will expect more and more revolutionary devices. Some people have reported that this company wants to move the television market. Through the device that will be able to transfer it live. Just like Microsoft, GM, IBM and other major companies, Apple has to face profits. The increase in profit results in a heavier maintenance of the product culture and its development.


It took only five years for Tesla to switch from bankruptcy to the big sale of electric cars. This jump generates questions about the future of motorization. Tesla's assumption from the very beginning was to produce cars with an electric-powered engine. The vehicle that offers among others: attractiveness, high efficiency, low maintenance costs. The first prototypes of Tesla vehicles were made thanks to Elon Musk, his $6.5 million contribution and storage in Silicon Valley.

The expansion of production capabilities has always required strategic partners from Tesla. It is not only by economics but also by the limits of knowledge. In 2008, they started working with Daimler. They created a battery and drive system for their fleet, which is electrically powered. Another example is working with Toyota and Panasonic. Working with Japanese gives Tesla the opportunity to supply batteries for many years and building a Giga factory.


The Walmart store did not have any particular competition until Amazon appeared. The former sales leader is trying to introduce technology. Walmart and Amazon are fighting for the crown of online commerce. Everyone wants to have the best: engineers, product prices as well as the delivery time. They want to have power not only on online trade but on trade in general. Amazon is building more and more warehouses while Walmart pays more and more money into technology. The actions of both companies point to an important combination of stationary and online commerce.

Examples of Growth company

  • Amazon: Amazon is a growth company that has seen tremendous success since its founding in 1994. It is one of the world's largest online retailers and cloud computing providers, and has seen significant growth in its stock price since its initial public offering in 1997. Amazon has a diversified product portfolio that includes electronics, apparel, books, and much more, and services such as Prime Video and Amazon Web Services.
  • Tesla: Tesla is a growth company that specializes in electric vehicles and energy storage solutions. Founded in 2003, Tesla has seen tremendous growth in its stock price since its initial public offering in 2010. The company has pioneered the development of electric vehicles and has become a leader in autonomous driving technology. Tesla has also expanded its product portfolio to include solar panel installation, energy storage solutions, and electric vehicle charging stations.
  • Netflix: Netflix is a growth company that specializes in streaming video content. Founded in 1997, Netflix has seen tremendous growth in its stock price since its initial public offering in 2002. Netflix has become one of the most popular streaming services in the world, and it has a diverse library of movies, TV shows, documentaries, and original content. The company has also expanded its product portfolio to include the production of original films and series.

Advantages of Growth company

Growth companies offer many advantages to investors. These include:

  • Increased earnings potential. Growth companies have the potential to generate higher returns than other types of investments. This is because they are able to expand their operations, which leads to increased sales and profits.
  • Potential for long-term growth. Growth companies are able to take advantage of emerging markets, which can lead to long-term growth potential. This is because they have the resources to capitalize on opportunities in these markets.
  • Increased visibility. Growth companies often receive more attention from the media and investors, which can lead to increased visibility and brand recognition. This can lead to increased profits for the company.
  • Access to capital. Growth companies often have access to more capital than other types of businesses. This can lead to increased investments and more rapid expansion.

Limitations of Growth company

Growth companies have their own limitations, which can prevent them from gaining the desired success. These limitations can include:

  • Limited access to capital - Growth companies often lack the necessary capital to finance their expansion plans. This can limit their growth potential as they will have difficulty accessing the resources they need to grow.
  • High risks - Growth companies are typically riskier investments as they may not have the necessary resources or experience to navigate difficult markets. This can lead to greater losses for investors if the company does not succeed.
  • Shortage of skilled labor - Growth companies may lack the necessary skilled labor needed to fulfill their growth plans. This could lead to delays in their expansion efforts, which can slow the growth of the company.
  • Regulatory issues - Growth companies may have difficulty navigating the regulatory environment, which can limit their market access. This can also lead to costly legal fees that can eat away at their profits.
  • Market competition - Growth companies may face stiff competition from existing market players, which can limit their growth potential. This can lead to a decrease in profits and market share.

Other approaches related to Growth company

Other approaches related to Growth company are:

  • Management strategy - Growth companies can focus on different strategies such as cost leadership, differentiation or focus. Each strategy requires different management skills and approach.
  • Financing - Growth companies use different sources of financing such as debt, equity and venture capital.
  • Marketing - Growth companies use aggressive promotion, advertising and marketing to attract customers for their products.
  • Innovation - Growth companies are often in the forefront of innovation and development of new products and services.

In summary, growth companies require different approaches from their management, as well as different sources of financing, marketing and innovation. Use of these approaches can help them to achieve their goals of increasing earnings.


Author: Aneta Suder