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7 Examples of Scalability

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Scalability is the degree to which adding resources improves results. A scalable business or technology allows unit costs to drop costs as you add resources such as capital and labor. The following are illustrative examples.


A retail chain is typically considered scalable as long as it can launch new stores without declines in same-store sales.


In many cases, adding new staff to a project or process results in drops in average productivity as the work to coordinate with more people outweighs their labor. A process or project is scalable if you can add people without declines in productivity.


Historically, adding more computers to a problem involved quite a bit of overhead such that scalability was limited. Modern techniques such as cloud computing have overcome such problems to the extent that services can be designed to be deployed at scale that is only limited by physical realities such as the number of data centers you can afford to build.


Solving environmental problems may require clean industries that are cheaper and more scalable than polluting alternatives.


Manufacturing tends to scale well until you need to add new equipment or factories. If you can produce a maximum of 10,000 units a day in a factory, producing 10,001 units a day is going to be expensive because you need a new factory.

Business Model

A company that is growing its revenue by 90 percent a year looks attractive to novice investors who don't notice that expenses directly related to sales are increasing by 220 percent a year. It is almost always possible to generate sales by spending a lot of money. As such, investors in growth companies will carefully inspect results for signs that revenue can be scaled profitably.


A company hires 100 salespeople at a total annual cost of 20 million. Sales only improve by 15 million, indicating their business model may not be scalable. If sales improved by 100 million, the company would have an indication that sales are scalable.
Overview: Scalability
Related Concepts
Next: Economies Of Scale
More about scalability:
Business Scale
Design For Scale
Diseconomies Of Scale
Economies Of Scale
Horizontal Scale
Production Scale
Vertical Scale
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