Which growth strategy occurs when a company expands through acquiring or merging with firms in other markets or industries?

• A. internal growth
• B. diversification
• C. horizontal integration
• D. external growth

Answer: (D)

External growth is growth achieved by merging with or acquiring other firms. This approach lets a company quickly enter new markets or industries by bringing in another business, rather than building everything from within. The scenario describes expanding through acquisitions or mergers with firms in other markets or industries, which fits external growth perfectly. Horizontal integration, by contrast, stays within the same industry, and internal growth relies on the company’s own resources. Diversification involves entering new markets or products, but the mechanism described here—acquiring or merging—points to external growth.