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

Which term describes a company's growth through its current business instead of acquisitions?

1. Vertical Integration

2. Organic Growth

3. Horizontal Expansion

4. Market Development

The correct answer is: Organic Growth

The term that best describes a company's growth through its current business, rather than through acquisitions, is organic growth. This type of growth involves increasing revenue and expanding operations by leveraging existing resources, enhancing customer relationships, improving product offerings, or optimizing operational efficiencies. Companies may pursue organic growth by investing in marketing campaigns, developing new products, or entering new markets directly, all while using their own capabilities and resources rather than acquiring another company. Vertical integration refers to a strategy where a company expands its operations by acquiring or merging with other companies at different stages of the supply chain, which is not aligned with the idea of growth through existing operations. Horizontal expansion involves growing a business by increasing market share within the same industry, often through acquisitions of similar businesses, which again does not match the concept of organic growth. Market development focuses on expanding into new markets with existing products but can involve external partnerships or acquisitions, diverging from the pure notion of organic growth.