Greenfield and Brownfield Investments

Question

Hi!

I have a few questions about Greenfield and Brownfield investments and how to think about them. My understanding is that Greenfield investments are when a company builds facilities from the ground up in a foreign country while Brownfield investments are when companies build off of existing facilities, such as an existing business.

My follow-up questions are:

Is Greenfield considered organic expansion and Brownfield considered inorganic?
If so, does Brownfield encompass M&A? Or is it more closely related to partnerships/joint ventures?
Are Greenfield/Brownfield only applicable to international expansion?
Are these terms only applicable to the development of land/property or can they be applied to business development as well (i.e. expanding product offerings to new markets)?

Any insights would be appreciated, thank you!

Answer 1

Hi there,

I would be happy to share my thoughts on your questions:

First of all, the Greenfield/Brownfield concept does not seem to match perfectly with the organic/inorganic one. While Greenfield projects seem to be always organic, Brownfield projects are not always inorganic, e.g., if you license your products.
Moreover, Brownfield includes M&A, joint ventures, strategic partnerships, and other types.
Lastly, the Greenfield/Brownfield model can also be applied to product development and operational investments.

If you would like a more detailed discussion on your specific situation, please don't hesitate to contact me directly.

Best,

Hagen

Answer 2

Good questions! Let me put my answers below.

1. They can both be organic or inorganic - depends on the context. As an example: if I upgrade my existing factory in order to manufacture a new product: that is an organic, brownfield investment. If I buy another company so that I can access and upgrade their factories: that is an inorganic brownfield investment. Greenfield vs. brownfield is determined by whether the facility is brand new, or whether it’s been upgraded. Inorganic vs. organic is whether M&A is involved. You can’t fully conflate the two.

2. See above. Greenfield vs. brownfield is purely about whether you’re building a new facility or upgrading / changing an existing one. It’s not about whether M&A or partnerships are involved.

3. No - I could develop or build a greenfield site in my domestic/home market

4. It’s mostly about land/property/facilities/O&G or mining leases. I’ve never heard it used to describe product expansion in any other context.

Hope this helps!

Answer 3

Greenfield means "brand" new. Brownfield means using something that already exists.

M&A, Geography, etc., has no impact on this.

I've never seen it being applied to product expansion or entering a new market. Usually is related to investment in infrastructure / facilities.

Answer 4

Hi there,

I see you've received several great explanations already.

I just wanted to add that consulting interviews—for more roles—do not test for your knowledge but your skills.

So if you happen not to know a term or a formula, feel free to politely and proactively ask the interviewer to clarify it.

If you do happen to know such terms, it can help, but it's not a must.

Best,
Cristian

Answer 5

Hey!

Your understanding is already quite solid! Just to clarify:

Greenfield and Brownfield are about how a company sets up operations—not necessarily where or whether it's organic or inorganic. Greenfield means building new from scratch, Brownfield means modifying or acquiring existing assets. So yes, Brownfield can be either M&A (inorganic) or internal upgrades (organic). Same with Greenfield—it could be internal expansion or a joint venture.

They’re not limited to international expansion—you can absolutely have domestic Greenfield or Brownfield investments. And yes, the terms are generally used for physical assets (factories, infrastructure, energy projects), not for product launches or general business development.

Best,
Alessa :)

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