A Greenfield venture is a form of foreign direct investment (FDI) where a parent company creates a subsidiary in a foreign country by constructing new facilities from the ground up. This approach offers the multinational organization complete control over the design, technology, and operational processes, allowing it to build a facility that precisely fits its strategic needs. It is contrasted with other entry modes that involve acquiring or partnering with existing entities. The term "Greenfield" metaphorically refers to starting a project on a piece of undeveloped land.

A. Brownfield projects involve acquiring or leasing pre-existing facilities and redeveloping them, not building entirely new ones from scratch.

C. Franchise operations are a contractual arrangement where a business licenses its brand and model to a franchisee, not a direct investment in building facilities.

D. Mergers and alliances involve combining with or partnering with existing companies, which is fundamentally different from creating a new operation from the ground up.

1. Hill

C. W. L.

& Hult

G. T. M. (2021). International Business: Competing in the Global Marketplace (13th ed.). McGraw-Hill Education. In Chapter 13

"Entering Foreign Markets

" the text distinguishes between Greenfield ventures (establishing a new operation) and acquisitions (acquiring an existing firm).

2. University of Minnesota Libraries Publishing. (2015). Mastering Strategic Management. In Chapter 8

Section 8.2

"Types of International Strategies

" a Greenfield venture is explicitly defined as a foreign operation that a firm creates entirely from scratch.

3. Meyer

K. E.

& Estrin

S. (2001). Brownfield entry in emerging markets. Journal of International Business Studies

32(3)

575–584. https://doi.org/10.1057/palgrave.jibs.8490985. This article's abstract and introduction clearly differentiate between Greenfield investment (new facilities) and Brownfield entry (acquisition of existing assets).