External Growth - GCSE Business Definition

External growth, or inorganic growth, refers to the expansion of a business through methods outside of its internal operations. This typically involves merging with or acquiring other companies. This increases the firm's market share, diversifies its products or services, gains access to new markets, and achieves economies of scale more rapidly than through organic growth. For GCSE Business students, understanding external growth is important because it is a strategic way of expanding by leveraging existing resources and capabilities of other firms rather than solely relying on their own. This approach offers immediate advantages but also involves higher costs and integration challenges.