Greenfield Expansion

Abstract

Greenfield investment is the misunderstood brother of the overseas expansion triplets. Some survey participants viewed it quite quizzically as if it shouldn’t be considered with acquisitions and strategic alliances as a legitimate mechanism for overseas extension. One participant smiled and said, “You need to differentiate between organic growth and entering another country. I consider the first part of that statement my day job.” But he is right—greenfield expansion into a new market is a bona fide option for entering a new market and those who “got it” relished it. They prefer greenfield expansion as a sustainable form of development where they maximize returns. In fact, the executive who considered it his day job also said it was his favorite mode of expansion because it gave the company total control and a large upside when they got it right. And the survey participants indicated they “got organic right” more than any other mode of market entry.