Which term refers to growth of a business through mergers or acquisitions?

Which term refers to growth of a business through mergers or acquisitions?

• A. Globalization
• B. External Growth
• C. Franchise
• D. Fixed Costs

Answer: (B)

External growth is growth that happens by merging with or acquiring another business. It lets a company expand quickly by combining assets, markets, and capabilities from the other firm, rather than building them from within. This is different from growing through the company’s own operations (internal or organic growth), which uses existing resources and processes to expand. Globalization, while related to expanding into international markets, isn’t defined by mergers or acquisitions. A franchise involves expanding by licensing the brand and business model to others, not by merging with or purchasing another company. Fixed costs are a cost category, not a growth method.

External growth is growth that happens by merging with or acquiring another business. It lets a company expand quickly by combining assets, markets, and capabilities from the other firm, rather than building them from within. This is different from growing through the company’s own operations (internal or organic growth), which uses existing resources and processes to expand.

Globalization, while related to expanding into international markets, isn’t defined by mergers or acquisitions. A franchise involves expanding by licensing the brand and business model to others, not by merging with or purchasing another company. Fixed costs are a cost category, not a growth method.