Question

Lucar Steels Inc. has decided to enter into a foreign market by setting up its own production facilities and distribution channels from scratch. This will allow it to have strong control over all of its business activities. What is the foreign entry mode most likely opted by Lucar Steels Inc.?

Answer 1

Answer: Greenfield Operation

Step-by-step explanation:

In Greenfield type projects, a company engages in a form of Foreign Direct Investment where they essentially set up a Subsidiary in another country.

They invest in building offices, production plants,products and all other things they usually do in that country.

They also manage all the operations and control the company's activities as much they can.

Essentially, they start from the GROUND LEVEL.

Lucar Steels wants to enter into a foreign market by setting up its own production facilities and distribution channels from scratch. This is definitely a GREENFIELD PROJECT.