BUSINESS ADMINISTRATION
STRATEGIC MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Acquisition
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Brownfield investment
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Joint venture
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Greenfield development
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Detailed explanation-1: -A green field investment analysis can have slightly higher risks than an acquisition because the costs may be unknown. With an acquisition, analysts usually have actual financial statements and costs to work with.
Detailed explanation-2: -Specifically, Greenfield FDI is when companies set up or expand their business operations abroad, creating brand new jobs and/or facilities from the ground up-as opposed to mergers and acquisitions, which occur when one company buys another.
Detailed explanation-3: -A greenfield investment or expansion refers to a parent company opening a subsidiary in a different country. Unlike brownfield expansions, this form of expansion does not include purchasing an already existing facility. Instead, it is the beginning of a new venture by constructing new facilities in the host country.
Detailed explanation-4: -Advantages of a Greenfield Investment High control over brand image and staffing. Economies of scale and economies of scope can be achieved in terms of marketing, research and development, and production. Bypassing trade restrictions. Creating jobs for the economy where the greenfield investment is taking place.