Final answer:
Businesses struggle to scale in industries with limited economies of scale, against established competitors, and in small economies with less competitive pressure. The U.S. Small Business Administration highlights high small business turnover, emphasizing a focus on core competencies for success.
Step-by-step explanation:
Types of businesses that are particularly difficult to scale often find themselves in industries where economies of scale are marginal compared to the market demand. Additionally, businesses that compete against firms with a well-established reputation for slashing prices or those with a well-respected brand name built over years face significant scaling challenges. When entering into international trade, smaller economies may lack the competitive advantages, making scaling difficult.
The intense process where firms unable to profit consistently exit the market impacts small firms significantly. As indicated by the U.S. Small Business Administration, the majority of business entries and exits involve small businesses with fewer than 20 employees. Having a core competency, where a business focuses on one or a few products, tends to be more successful than trying to offer a broad range.