Question

A company is creating a website that allows users to upload drawings made in just 5 seconds and get ratings and comments by other users. Currently there are 1000 subscribers doing about 5 drawings a day, but in their wildest dreams they predict they can scale up to 1 billion users doing 10 drawings a day.

a) Should the company invest in capital expenditure or operational expenditure initially?

b) What is the difference between each?

c) Should they change their investment strategy later?

d) What cloud services would this company potentially make use of?

Answer 1

a) As the company is trying to grow but initially it is a small company so it should invest in operational expenditures like paying salaries and general administrative expenses

b) here operational expenditure means daily expenses used to run a company like paying salaries and general administrative expenses where as capital expenditure is where a company tries to expand its business when their user base is increased

c) yes a single strategy won't be used through out the business strategies are changed based on the situation of the company and whether it's start up or a huge popular company the strategies will change

d) here it basically need to store the user's data and also the drawings uploaded so its better to use Amazon web services.