How to Compete with ower Wage Rivals in Business
To compete with lower-wage rivals, companies have come up with several different strategies over the long history of corporations. Three of the main strategies, as have been used over the years, are to provide better wages for the workers, to provide benefits to the workers, and to use robots.
The obvious strategy against a lower-wage rival is to increase the wage of the international company. By having a larger wage, the possible future workers will be more likely to try to get employed by the international corporation rather than the lower wage rival. Not only this, providing the higher wage to the workers, the workers now will have more revenue to spend. The workers would likely spend some of their revenues on the international company’s product. An example of this is the famous American automobile company Ford. They will pay their worker's high wages, in which, the workers would spend their revenue buying a Ford car. With this tactic, the lower rates rival would lose potential workers and the international corporation would gain not only more workers but also more consumers.
A second strategy used by several corporations is to give more benefits to the workers. Benefits list from a variety of things, whether it be better to pay for the employee monthly or even education. With benefits like bonuses, the workers would be more motivated to work. With education, the workers would be more capable and able to complete more high-level tasks. When the competition between the lower wage rival international companies prolongs, it is more likely that the motivated and educated workforce will produce better products/services than the uneducated workforce. Future workers would also desire employment where benefits are given. An example of such companies is Samsung. The company provided housing and commuting to its workers. Samsung would even send and financially back up several workers that went to universities. Of course, it will take time to educate and a large amount of their revenue, but the educated workforce could provide more efficient and calculated choices for the company. They could discover different and cheaper ways to produce a product or a more efficient way for a system.
The third and most recent strategy used by international corporations is to use robots and machines rather than human workers. The unknown fact is that it is not the immigrants but the robots who are stealing jobs for the workers that truly play a hand in the strategy. Robots and AI have shown an increase in jobs lately. It is estimated that about 77% of Chinese jobs and 69% of jobs in India would be replaced by robots and AI. So far the sales of robots and AI have increased 116% in the last few years. The use of robots and AI does mean that the company does not have to spend wages or deal with unions. In other words, one way to compete with a low-wage rival is to have close to no wage at all. There is also a benefit of the machines not having to eat, sleep, or rest.
