Edit: This question attracted way more interest than I hoped for! I will need some time to go through the comments in the next days, thanks for your efforts everyone. One thing I could grasp from the answers already - it seems to be complicated. There is no one fits all answer.

Under capitalism, it seems companies always need to grow bigger. Why can't they just say, okay, we have 100 employees and produce a nice product for a specific market and that's fine?

Or is this only a US megacorp thing where they need to grow to satisfy their shareholders?

Let's ignore that most of the times the small companies get bought by the large ones.

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[–] 3 points 1 year ago*

Growth=good is also a sentiment for whole markets.

In a market where new customers start buying the products every day (growth market), e.g. the smartphone market 20 years ago, you can generally just come up with new products and someone will buy them, if they're good.

On the other hand, in a market where customers only replace their old products as needed (market saturation), e.g. basically the smartphone market of today, things are much more tight for companies. They have to primarily be more cost-efficient than their competitors in order to survive.

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