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AWA Response - Please Rate

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Surbhi28 Newbie | Next Rank: 10 Posts Default Avatar
Joined
25 Sep 2017
Posted:
1 messages

AWA Response - Please Rate

Post Mon Sep 25, 2017 11:24 pm
The following appeared as a part of an article in the business section of a local newspaper:

"The Cumquat Cafe made a mistake in moving to a new location. After one year at the new spot, it is doing about the same volume of business as before, but the owners of RoboWrench plumbing supply wholesale outlet that took over its old location are apparently doing better: RoboWrench is planning to open a store in a neighboring city."

Discuss how well reasoned.... etc.

Response:

In the above argument, the author concludes that The Cumquat Cafe made a mistake in moving to a new location. The line of reasoning is primarily based on comparison of Cumquat Cafe with RoboWernch plumbing supply wholesale outlet. However, the argument is vague and fails to consider several important points.

The author has conveniently compared Apples with Oranges and has come to the conclusion that moving to a new location was a huge mistake for Cumquat Cafe. Cumquat cafe is a cafeteria or say a food place whereas Robowrench is a Plumbing supply wholesale outlet. There are different factors which determine the success of different kinds of businesses such as the brand name, the type of business, the customer base, the requirement in that particular locality, the season time etc. For instance, Robowrench is only plumbing wholesale outlet in its locality whereas the Cafe has a lot of competition. The Cafe would be doing good business but not in comparison with the supply outlet.

The author assumes that the Cafe doing about the same volume of business as before is an indication that moving was a mistake. When a business is set up in a new locality, it takes time for it to acquire customers. However, if the cafe is doing the same business as it did in it's previous location is a good thing. When comparing the profits, the author should once consider the number of years Cumquat Cafe did business in the previous location and the business it made during the first two initial years. If the Cafe made less profits in the first two years of the previous location then the author assumption stands wrong.

Also, the author of the article has come to a conclusion that the Robowrench plumbing supply wholesale is doing better, just because they are planning to open a store in a neighboring city. Opening a store does not imply any business is doing better. Robowrench's business model could be completely different than Cumquat Cafe. The author should consider checking where exactly the funds for setting the new store is coming from, does Robowrench has other multiple stores etc. Robowrench might have other stores and they are looking to expand.

Overall, the article in the business section misses on points such as; comparison between two different kinds of businesses without considering all the factors is not wise; Secondly, the basis that the Cafe is doing a good business should be compared with it's profits in the first two years of it's business in previous location; Lastly, the assumption that since Robowrench is opening another store that means it is doing well.

The above mentioned points should be considered before coming to a conclusion that Cumquat Cafe made a mistake shifting to a new location.

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