Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What term describes the growth of business through acquiring new businesses via mergers, acquisitions, and take-overs?

1. Organic Growth

2. Inorganic Growth

3. Market Growth

4. Demand Growth

The correct answer is: Inorganic Growth

The term that describes the growth of a business through acquiring new businesses via mergers, acquisitions, and take-overs is known as inorganic growth. This type of growth occurs when a business expands by purchasing other companies or forming partnerships, rather than growing internally through its existing operations or processes. Inorganic growth is characterized by its focus on external factors for expansion, positioning the acquiring company to quickly increase its market share, diversify its product offerings, or enter new markets without the lengthy process of developing these elements organically. Other terms such as organic growth refer to increasing revenue and expanding the business through internal improvements and sales strategies rather than external acquisitions. Market growth focuses on the overall increase in demand and consumption of goods in a particular market and does not apply specifically to an individual company's strategy. Demand growth reflects the increase in consumer desire for a product or service and is also not specific to acquisition strategies. Thus, inorganic growth specifically captures the essence of business expansion through mergers and acquisitions.