Low Wage Case Study

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PART A: QUESTION 1: Low wage rates is one of the advantages international companies enjoy when they decide to produce in a particular location. The advantage arise due to the difference currency rate between countries. A close example would be Malaysia and Singapore. Every $ 1 of Singapore equals to RM 2.6 of Malaysia. Malaysia is a developing country. Low wage is Malaysia and other countries similar to Malaysia is just the impact of global capitalism. Companies that choose to pay low wages by setting up their firm in low wage countries often have the aim of generating fast and more income. This is especially true if the foreign country is poor (Krugman & Wells, 2012) (Galizzi, 2005) (Piekkola & Snellman, 2008) (Friedman, 2011). However…show more content…
In any society people with higher income are willing to spend more for better living standard compared to those with lower income who spend on what they really need. Some spend more on entertainment and leisure activities since their culture does not restrict but on the contrary there are people with higher income spend wisely. b) Political Stable political of a country is also instrumental as it can impact decision of economic activities. A stable political situation is vital to make people feel safe when people visit entertainment places. The stable political situation also ensure that the interest if business entities or investors are well taken care. c) Branding Hard Rock Cafe takes branding very carefully as in certain countries naming trademarks are sensitive. Thus indebt studies are carried out to avoid any situation where customers do not feel outraged or boycott which in return result in…show more content…
It serves consumers from all folks of the society. Since the business concept is based on food, beverage and entertainment, their international business location selection criteria needs to be customized and different from other sectors such as manufacturing or banking services. Demographic and physical climate is exclusively important for Hard Rock compared to other businesses (Dlabay & Scott, 2010). Size of the population will determine their business success because these are their potential consumers. This is because not all the segments of population will become consumers of Hard Rock. For example, if a food chain business is expanded, almost all the population can be expected to become the consumer because people need food as a basic need. In the aspect of Hard Rock, there are only certain type of population that will seek the presence of entertainment while dining. Demographic factor is important to consider in terms of the socioeconomic status of the majority population. Hard Rock is not a place for consumers with average or low household income. If the corporation intended to create high profit margin even from the beginning, their business should be located at a place with majority high income

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