International Business Expansion : A guide to decision-making for greenfield expansions

Abstract: Globalization has gradually increased exchanges and connections between countries. For companies, globalization entails enhanced opportunity. They embrace a broader set of business possibilities, and leverage resources in foreign countries, by growing their business abroad. The process of organic growth via the creation of a greenfield subsidiary will be studied in this paper. Such expansion can be challenging due to the number of unknown parameters involved, making greenfield expansions a risky investment. To manage risks and to increase the chances ofsuccess, firms have to analyze a diverse set of factors. The purpose of this study is to generate a framework facilitating well-informed decisions about opportunities and uncertainties in order to manage international expansion. Specifically, the study aims to answer the following question: What are the key factors to consider for a French firm seeking to open a subsidiary company in a Schengen-member country? The thesis focuses on finding patterns among companies that have successfully realized an international expansion, as to define the main criteria to reduce uncertainties. A qualitative study was used to get firsthand insights. The investigated companies come from different industries toget as much details as possible and to be able to define a general pattern to improve their decision making. The framework provided in the thesis lists key factors to consider for international business expansion. In addition, these criteria were mapped regarding the level of uncertainty they create and the level of control the company has over them, as a way to prioritize them. The framework is not a “fit-all” solution, but a tool for navigating critical decisions in the context of international greenfield investment.