Final answer:
The main advantage of direct investments is that the retailer maintains complete control over the operations, which can lead to more effective management and strategic advantages.
The correct option is 1)
Step-by-step explanation:
The key advantage of direct investments among the provided options is that the retailer has complete control of the operations. This level of control can lead to more effective management and the ability to respond quickly to market changes.
It is important to note, however, that retailers are not exempt from trade taxes or local trade laws, nor are they at liberty to choose which nation's laws they adhere to. Foreign direct investment typically involves long-term commitment and strategic planning, as it assumes some managerial responsibility and is not as quickly liquidated as portfolio investments.
Through foreign direct investment, multinational corporations can take advantage of specialization and economies of scale, often resulting in benefits like more competition, variety for consumers, and possibly lower prices for consumer goods.
The correct option is 1)