Question 19

Companies build new factories and offices from scratch in greenfield operations.

Greenfield operations refer to the establishment of new facilities or offices from the ground up, allowing companies to create a site tailored to their specific needs without the constraints of existing structures.

A) Joint ventures

Joint ventures involve two or more companies collaborating to undertake a specific project or business activity, sharing resources and risks. This mode does not entail building new facilities from scratch but rather combining existing assets, making it incorrect for this question.

B) Direct exports

Direct exports refer to the process of selling goods produced in one country directly to customers in another country. This approach does not involve the establishment of facilities or offices, thus it is not relevant to the question of building new operations.

C) Greenfield operations

Greenfield operations are characterized by the complete construction of new facilities and offices, making them ideal for companies looking to establish a fresh presence in a new market. This option correctly describes the scenario of building from scratch.

D) Co-marketing operations

Co-marketing operations involve two or more companies collaborating on marketing efforts to promote their products or services. This strategy does not involve the creation of new facilities or operations, making it an incorrect choice in this context.

Conclusion

Greenfield operations are the only mode of entry that specifically involves building new factories and offices from the ground up, allowing for complete control over the design and function of the facility. All other options fail to meet this criterion as they either involve existing structures or focus on different aspects of business operations.