Downstream vertical FDI refers to which of the following?

Downstream vertical FDI refers to which of the following?

• A. Engagement in upstream stages of production
• B. Investments in marketing operations
• C. Engaging in a downstream stage of the value chain
• D. Investment in logistics and supply chain management

Answer: (C)

Downstream vertical Foreign Direct Investment (FDI) focuses on activities that occur later in the value chain. Engaging in a downstream stage involves investing in processes that transform raw materials into final products or in roles that handle the marketing and distribution of finished goods. This typically includes activities like branding, sales, customer service, and any aspect of getting the product directly to consumers. Therefore, when a company engages in downstream vertical FDI, it is investing in areas that are closer to the end consumer, helping to enhance its market reach, improve customer engagement, enhance branding strategies, and ultimately drive higher sales. This type of investment is critical for businesses seeking to create a competitive advantage through increased control over how their products are presented and delivered to the market. In contrast, upstream engagement, investments solely in logistics, or operations related to marketing without the broader scope of downstream business integration do not capture the essence of downstream vertical FDI as accurately as the emphasis on comprehensive consumer-facing operations.

Downstream vertical Foreign Direct Investment (FDI) focuses on activities that occur later in the value chain. Engaging in a downstream stage involves investing in processes that transform raw materials into final products or in roles that handle the marketing and distribution of finished goods. This typically includes activities like branding, sales, customer service, and any aspect of getting the product directly to consumers.

Therefore, when a company engages in downstream vertical FDI, it is investing in areas that are closer to the end consumer, helping to enhance its market reach, improve customer engagement, enhance branding strategies, and ultimately drive higher sales. This type of investment is critical for businesses seeking to create a competitive advantage through increased control over how their products are presented and delivered to the market.

In contrast, upstream engagement, investments solely in logistics, or operations related to marketing without the broader scope of downstream business integration do not capture the essence of downstream vertical FDI as accurately as the emphasis on comprehensive consumer-facing operations.