Several reasons explain why a business wants to grow. Growing a business is part of management goals. They want to expand the company’s business into new markets to increase shareholder value.
Value is created when growth increases profits and returns to shareholders, reflected in larger dividends and higher share prices.
To increase profits, companies try to dominate the market. Apart from benefiting from a larger market share, being a market leader also improves bargaining power with suppliers and customers. Large companies also have more influence on market prices.
Also, with more extensive operations, companies enjoy economies of scale. They can spread costs across a large number of outputs, driving lower unit costs. That allows the company to have a lower cost structure than competitors.
Growth is not only aimed at increasing profits but also securing future profits. Companies can diversify their business or products into different segments. Running multiple different businesses reduces the risk of failure in one business.