Greenfield Venture Case

Introduction

A Greenfield venture is a form of strategy where the company’s focus is to enter a new market without the help of another business which already exists. This type of strategy requires a new infrastructure and invention of new jobs. It is the creation of a complete business operation, from the ground up.

Trade Policies

France is the 8th largest trading partner of the United States and is also a member of the European Union that has put up with the European Union trade policies. The European Union gives orders for the day to day operations, legislation and decision making to the European Commission. They are responsible for enforcing the European Union’s trade treaties, therefore as a member of the EU, the European Commission is responsible for bargaining, consulting and negotiating with France’s best interest in mind, and France has the legal obligation to stand by the Commission’s decisions.

France is also the second largest agricultural exporter and the 4th largest market for exports. France’s leading trade associates are members of the European Union, which excludes the United States. Less than five percent of France’s companies are actively involved in exporting activities. This is very important since France has over two million companies and the rate of foreign investment has increased, which has invented new jobs. France has skilled labor force and the government’s support to promote, create and attract foreign investors. France could be the escape to a larger market.

Mexico is the 3rd largest trade partner for the United States. Mexico has a “personal”, trading relationship with the United States. The North American Free Trade Agreement, both countries have liked and promoted a sense of joint cooperation that has resulted in several mutual agreements that have enabled free trade on items like: sugar, cement and tequila; increasing economic assimilation for both countries. The Mexican trade policy promotes foreign investment and is mostly focused around manufacturing.

Economic Background and Currency

France has been able to protect against currency risks, thanks to the adoption of the Euro as their trade currency, to their capacity to make use of their foreign investment, and to their ability to reduce the risks of loss caused by price fluctuations. Even though France lost close to nine percent of their revenue growth in 2004, the demand for French goods combined with the Euro’s strength enabled France to weather the storm and remained as one of the world’s top ten economies (Tested by the mighty euro, 2004). France’s economic outlook is not good and that they are experiencing a recession; never the less, their trade currency (Euro) is a solid fixed currency within the EU area. Unfortunately, the Euro continues to vary against all other currencies which add