-
dhanda.arun
- Senior | Next Rank: 100 Posts
- Posts: 52
- Joined: Thu Jul 31, 2008 12:30 pm
- Thanked: 5 times
The following is part of a business plan created by the management of the Megamart grocery store:
“Our total sales have increased this year by 20 percent since we added a pharmacy section to our grocery store.
Clearly, the customer’s main concern is the convenience afforded by one-stop shopping. The surest way to increase
our profits over the next couple of years, therefore, is to add a clothing department along with an automotive supplies
and repair shop. We should also plan to continue adding new departments and services, such as a restaurant and a
garden shop, in subsequent years. Being the only store in the area that offers such a range of services will give us a
competitive advantage over other local stores.”
Discuss how well reasoned . . . etc.
The author concludes that the surest way to increase the profit over the next couple of years is to add a variety of new department and services because total sales has increased after the addition of the pharmacy section.. The author’s line of reasoning is that customers prefer one stop shopping. However, a closer examination of the arguments presented reveals numerous examples of leaps of faith and poor reasoning.
First of all, the argument is based on the questionable assumption that sales have increased by the addition of the pharmacy section. However, author does not provide any logical evidence of this correlation. The increase in sales may be because of some special event like clearance sale or because of special discounted prices. Further, only increase in total sales does not mandates an increase in total profit. It could be possible that total costs have also risen along with total sales. If this is the case, then an addition of further stores will not necessarily led to an increase in profit over the coming years.
Moreover, the success of pharmacy section does not mandate the success of other sections as well. It may be the case that there is no pharmacy shop in the vicinity of the mart and so the pharmacy section is successful. But the same analogy can’t be applied logically to other stores. For example, if there are a few clothing stores in the vicinity of the store, then the store will have to compete with those. Unless author provides more evidence regarding these facts, it is hard to conclude that the other sections will be as successful as pharmacy section.
Finally the argument is based on the assumption that customer’s main concern is one stop shopping. Although one stop shopping is convenient, but if the store does not offer competitive prices, customers will not prefer to shop in the store.
In sum, I agree that in order to make the argument more convincing, author should try to show the actual profit rise from the pharmacy section and the more logical reasons for starting up new sections.
“Our total sales have increased this year by 20 percent since we added a pharmacy section to our grocery store.
Clearly, the customer’s main concern is the convenience afforded by one-stop shopping. The surest way to increase
our profits over the next couple of years, therefore, is to add a clothing department along with an automotive supplies
and repair shop. We should also plan to continue adding new departments and services, such as a restaurant and a
garden shop, in subsequent years. Being the only store in the area that offers such a range of services will give us a
competitive advantage over other local stores.”
Discuss how well reasoned . . . etc.
The author concludes that the surest way to increase the profit over the next couple of years is to add a variety of new department and services because total sales has increased after the addition of the pharmacy section.. The author’s line of reasoning is that customers prefer one stop shopping. However, a closer examination of the arguments presented reveals numerous examples of leaps of faith and poor reasoning.
First of all, the argument is based on the questionable assumption that sales have increased by the addition of the pharmacy section. However, author does not provide any logical evidence of this correlation. The increase in sales may be because of some special event like clearance sale or because of special discounted prices. Further, only increase in total sales does not mandates an increase in total profit. It could be possible that total costs have also risen along with total sales. If this is the case, then an addition of further stores will not necessarily led to an increase in profit over the coming years.
Moreover, the success of pharmacy section does not mandate the success of other sections as well. It may be the case that there is no pharmacy shop in the vicinity of the mart and so the pharmacy section is successful. But the same analogy can’t be applied logically to other stores. For example, if there are a few clothing stores in the vicinity of the store, then the store will have to compete with those. Unless author provides more evidence regarding these facts, it is hard to conclude that the other sections will be as successful as pharmacy section.
Finally the argument is based on the assumption that customer’s main concern is one stop shopping. Although one stop shopping is convenient, but if the store does not offer competitive prices, customers will not prefer to shop in the store.
In sum, I agree that in order to make the argument more convincing, author should try to show the actual profit rise from the pharmacy section and the more logical reasons for starting up new sections.
