This delve into the decision-making of A.S. Watson

This essay focuses on AS Watson mass market retail stores in Arnhem. Arnhem was specifically chosen in order to narrow down the scope of investigation and due to the accessibility to primary data. This essay will delve into the decision-making of A.S. Watson mass market retail stores in Arnhem with regards to their hiring of employees. Moreover, the motives of those stores to hire youngsters under 18 will be investigated and whether it will lead to more producer revenue in contrast to producer cost. Thus, the following research question will be investigated: To what extent does the employment of youngsters under 18 in AS Watson mass market retail stores in Arnhem lead to producer revenue in contrast to producer costs?To approach this research question various sources will be used:Firstly, valuable statistics of A.S. Watson mass market retail stores in Arnhem will be used, which will provide further insight to the way they operate. Additionally, an interview with Caspar Oosterman, who is a manager of operational improvements in the company was conducted, in order to understand the motives behind the hiring of youngsters under 18. Furthermore, this essay is set to investigate whether the economic theories which relate to this research will be applicable to this real-life situation. It will be investigated by considering various elements for hiring youngsters such as the; minimum wage, tasks in the store, flexibility of youngsters and the rate of replacing employees, and whether those elements will ultimately lead to more producer revenue in contrast to producer costs. This topic is worthy of investigation for multiple reasons. Firstly, this investigation will shed more light on the dependency of the Dutch labor force on youngsters. It will be done by assessing whether the advantages outweigh the disadvantages, with regards to the employment of youngsters under 18. In addition, economic theories which are applicable to this real-life situation, such as the concept of profit maximization will be explored and challenged. HypothesisIt is expected that the employment of youngsters under 18 in A.S. Watson mass market retail stores in Arnhem will lead to producer revenue in contrast to producer cost. Ultimately youngsters under 18 are cheaper to employ, due to the presence of minimum wage. Thus, workers above the age of 18 will be relatively more expensive to hire. Additionally, it is expected that youngsters will be hired for the simple tasks in the store, which means that the time spend on training will be relatively low in comparison to other roles in the store which may be a bit more complex but are expected to be done by more experienced employees. Therefore, it is presumed that employing youngsters under 18 will lead to producer revenue in contrast to producer cost. BackgroundThis essay focuses primarily on A.S. Watson mass market retail stores in Arnhem. To fathom the concepts behind this question it is essential to understand the main theory which the question is based upon. Firstly, the “A.S. Watson Group is the world’s largest international health and beauty retailer with over 13,700 stores in 24 markets” . The group operates on an international level and the acquisition of the Dutch companies; Kruidvat, Trekpleister and Prijsmepper has helped it expand into the European markets. Furthermore, the research question focuses specifically on mass market retailers, thus even though that ICI Paris XL is also owned by A.S. Watson and have also stores in Arnhem, it will not be included in this investigation since it is not a mass market retailer. Mass market retailers are companies that sell products for an affordable price which appeals to a broad range of consumers. Moreover, the purpose of mass market retailers is not strictly to sell durable goods or to have an extraordinary service, though they aim to ultimately meet the needs and wants of consumers by the means of reasonable prices . The companies that fall under those specifications which are AS Watson owned and are also located in Arnhem are the following: Kruidvat, Trekpleister and Prijsmepper. According to the websites of Kruidvat, Trekpleister and Prijsmepper, there are 9 branches which are located within Arnhem. This is seen in the following three maps: As to be seen in figure 1, there is only one Trekpleister store located in Arnhem. Trekpleister is a neighborhood drugstore and it is “known for its informal, friendly store atmosphere and attractive promotions on a wide variety of products” . As to be seen in figure 2, there is only one Prijsmepper branch located in Arnhem. This is an expected outcome, since Prijsmepper is a relatively small company in comparison to Kruidvat and Trekpleister and it only has 15 branches located across the Netherlands.  As to be see in figure 3, there are 7 Kruidvat branches located in Arnhem. It goes without saying that Kruidvat has a bigger market share out of the three companies and as stated by A.S. Watson; “it is the commitment to making health and beauty accessible to all that has firmly established Kruidvat as the market-leading drugstore in the Netherlands” .Lastly, it is necessary to distinguish between producer revenue and producer cost. Revenue is the amount of money that a company receives during a specific period . In simple terms, this essay will consider whether the employment of youngsters generates more revenue or if it results in more costs to the companies which are investigated in Arnhem. Conversely, producer costs are basically the factors of production which are being utilized in this direct process of production. In this essay the labor component will be considered specifically as it represents the workers which are being employed. Chapter 1: Employment of youngstersIn the Netherlands, youngsters are a substantial part of the labor force. Despite the fact that many of the youngsters do not have a full-time job, they are still significant to the Dutch workforce. According to the World Bank , the labor participation rate for ages 15-24 in 2015 was approximately 68% out of the total labor force which was 8,996,356 in 2015 . This is a remarkable outcome, since it means that the Dutch labor force is highly dependent on the young population.  Figure 4, percentage of employees between 15-24 out of the total labor force in the NetherlandsHowever, this does not indicate how many of the youngsters work full time or part time. Which means that even though there are a significant part of the workforce many of them do not as much as the older population