Is ABC's new factory an example of internal growth?

• A. Yes, because ABC developed the technology itself and opened its own processing factory
• B. No, it's external growth via acquisition
• C. It's unrelated
• D. It's a failed growth strategy

Answer: (A)

Internal growth happens when a company expands using its own resources—investing in capacity, developing technology, and building new facilities with its own funds. In this case, ABC developing the technology itself and opening its own processing factory shows growth driven from within the business, not from buying or merging with another company. That’s why it’s considered internal (organic) growth. External growth would involve actions like acquiring another firm or forming a joint venture to gain capacity, which isn’t what’s described here. So this scenario fits internal growth because the expansion comes from ABC’s own development and investment.