Final answer:
Scalability is a business's ability to manage growth and increase production while maintaining efficiency, which is key to long-term success in today's competitive and technology-driven market.
Step-by-step explanation:
Scalability is the capacity of a business to handle increased demand efficiently while maintaining or improving profit margins. It is essential to the success of modern business firms because it allows them to grow and adapt in a competitive market. In today's fast-paced business environment, driven by advancements in information and communication technologies, firms face both opportunities and challenges in expanding their market reach.
Scalability ensures that a business can leverage economies of scale, where increased production leads to lower costs per unit, as seen in examples like Costco and Walmart. Additionally, with the concept of sustainable practices becoming crucial, businesses must invest in scalable solutions that are environmentally and economically viable in the long run. This notion applies to both small firms that grow by reaching new markets and large corporations that manage global operations efficiently.