Greenfield Investment
A form of market entry where a company builds its operations from the ground up in the target market, as opposed to acquiring or partnering with an existing local entity.
Implications
The establishment of a new operation or facility from scratch in a foreign country, often involving significant capital investment and the creation of new jobs, used to enter new markets or expand production capacity.
Example
Example: A car manufacturer makes a greenfield investment in Brazil by building a new production plant, creating jobs and expanding its market presence in South America.
Related Terms
Different from brownfield investment, where an existing facility is purchased and upgraded, greenfield investment involves starting from scratch, typically offering more control but requiring higher initial investment.
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