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CMA Final · Entrepreneurship and Startup · Scalability, Scaling up and Stabilisation of Sustainable Business

Kavya's ed-tech startup has proved product-market fit in two cities. Before expanding to ten more cities, which step is most consistent with sustainable scaling?

The sound approach is to standardise processes and confirm healthy unit economics, then expand in phases while tracking key metrics. This keeps risk controlled and makes growth repeatable. Rushing into all cities on short-term debt or cutting support undermines sustainability.

  1. AReplicating the offering in all cities simultaneously, funded by short-term debt, to beat rivals
  2. BStandardising processes and validating unit economics, then expanding in phases while monitoring key metricsCorrect
  3. CCutting customer support to conserve cash for advertising
  4. DPausing all expansion until the company is profitable in every city

Explanation

Sustainable scaling requires repeatable processes and sound unit economics before expansion, with phased roll-out and monitoring. Simultaneous expansion on short-term debt raises risk, cutting support harms retention, and waiting for profit in every city is unnecessarily rigid.

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