Final answer:
External Growth or Inorganic Growth is characterized by a company expanding through mergers and acquisitions, which differs from organic growth strategies such as reinvestment or innovation.
Step-by-step explanation:
External Growth, also known as Inorganic Growth, is characterized by expanding a company through mergers and acquisitions. A corporate merger involves two firms joining to form a single larger entity, often for various strategic reasons such as becoming more efficient, acquiring a new product line, or gaining a competitive edge.
In contrast, an acquisition refers to one firm buying another, typically with the purchasing firm being the dominant partner. Such growth strategies diverge from internal development, which relies on organic expansions like investing in human capital, technological improvements, and supportive public policies and institutions. These inorganic growth methods stand counter to strategies like cost-cutting measures or internal reinvestment of profits for organic growth.