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CH01-EX01. A Case of Declining a Growth Opportunity Based on Personal Criteria

  • Related Chapter: CH01. Setting Your Business Criteria
  • Related MN: MN01 Criteria and Purpose of Business Development
  • Related KM: KM004-growth-scale-and-tradeoffs.md (Growth scale and the costs of growth)

What This Case Illustrates

This case illustrates the principle (KM004) that growth scale is not a default that should automatically follow, but a strategic condition to be chosen by weighing the costs the entrepreneur is willing to accept. It shows that even a proposal that looks like a good growth opportunity can be declined when it conflicts with the criteria the entrepreneur has set.

The Case

There is a case of declining a proposal to open a second location in Seoul using additional investment. Meeting the investor’s expected return, while not disrupting the daily life chosen after moving to the countryside, emerges as an important precondition. In other words, although it was an opportunity to grow revenue and organization size, it can be seen as declined because the costs that would have to be accepted in exchange (a change in home base, dispersion of time, etc.) conflicted with the lifestyle criteria the entrepreneur had set.

Source: Price Is Strategy, INTRO “Where All Strategy Begins: Setting My Own Criteria,” pp. 15–17.

Implications

What matters is not which is absolutely right — growth or non-growth — but whether the growth level desired fits the business model, resources, and risk tolerance. This case also connects to the Not-to-do principle (KM005) in CH01, and shows how criteria are applied to an actual decision (accepting or declining an investment proposal).