Which term describes growth achieved by merging or taking over another firm?

Which term describes growth achieved by merging or taking over another firm?

• A. Organic growth
• B. Synergy
• C. Inorganic growth
• D. A business plan

Answer: (C)

Growth through merging or taking over another firm is inorganic growth. This occurs when a company expands by acquiring or merging with another business, quickly adding assets, markets, and capabilities rather than building them from within. Organic growth, by contrast, comes from expanding a company's own operations—like boosting sales, launching new products, or improving efficiency in its existing structure. Synergy describes the extra value that can come from combining two firms—such as lower costs or higher revenues—but it’s the benefit that can result from inorganic growth, not the method itself. A business plan is simply a document outlining goals and strategies, not a method of growth. For example, buying a rival to gain market share is inorganic growth, while opening new stores and increasing output in current locations is organic growth.

Growth through merging or taking over another firm is inorganic growth. This occurs when a company expands by acquiring or merging with another business, quickly adding assets, markets, and capabilities rather than building them from within. Organic growth, by contrast, comes from expanding a company's own operations—like boosting sales, launching new products, or improving efficiency in its existing structure. Synergy describes the extra value that can come from combining two firms—such as lower costs or higher revenues—but it’s the benefit that can result from inorganic growth, not the method itself. A business plan is simply a document outlining goals and strategies, not a method of growth. For example, buying a rival to gain market share is inorganic growth, while opening new stores and increasing output in current locations is organic growth.