Comprehensive and Detailed Explanation:
AGreenfield operationinvolves establishing a new business facility in a foreign marketfrom scratch. This includes acquiring land, constructing buildings, and recruiting staff. One of the most crucial factors during thedue diligencephase is understanding thelocal economy, including:
Availability of talent
Infrastructure stability
Inflation and currency risks
Local supply chains and logistics
Without a solid grasp of the economic environment, the company could face unforeseen costs or project delays.
GPHR Study Guide Extract – Strategic Global Human Resources / Market Entry Strategies – Greenfield Ventures:
“Greenfield operations require detailed due diligence on the local economy, labor availability, and political environment. These factors determine the feasibility and sustainability of new infrastructure and operations.”
Vested benefits and turnover apply more to acquisitions or mergers where employees and policies already exist.
