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 you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.
‘It is true,’ claims the Megamart managers, ‘that we will be adding an automotive supplies and repair shop, along with a clothing department to our grocery store. However, it will be unwise to underestimate the importance of convenience to the customer. Over the next two years, we plan to continue adding new departments and services, such as a restaurant and a garden shop, until we have almost a mini-mall attached to our store.’ This reasoning is flawed for several reasons. First, the managers assume that the Megamart is the only store in the area that provides one-stop shopping. In fact, all grocery stores in Megamart’s vicinity offer these services. It is doubtful that the Megamart has a monopoly on convenience
Second, the managers assume that convenience is the only reason customers buy groceries at Megamart. In fact, many people shop in the store because they like the quality of its food. It is likely, therefore, that the addition of a pharmacy, clothing, and automotive department will not significantly increase sales, nor will the addition of more departments in the future. The managers also do not address the possibility that the customers will find other stores more convenient. They might, for example, prefer a larger store with more departments, or a store closer to their home
The managers’ assertion that convenience is the most important thing to their customers is unsupported by any evidence. They cite the increase in sales as evidence of increased convenience, but it is difficult to discern whether the increase in sales is due to the convenience of one-stop shopping or the increased quality of food that has attracted more customers to the store. Nor does it appear that the managers have determined whether convenience or quality is the primary reason that people choose Megamart over its competitors
The only evidence offered to support the managers’ conclusion is the increase in sales. This evidence is insufficient to prove that the addition of more departments and services such as a restaurant and a garden shop will increase profits. The managers should examine sales from previous years and note which departments and services are most profitable. Based on this information, they should consider which departments and services to add or discontinue. For example, the managers may discover that the garden shop, which caters to the affluent, is not a profitable addition to the store. They should also consider the anticipated profits from each additional department or service. Before adding an automotive supplies department, for example, they should consider the cost of the equipment necessary to provide the service. If they think that the added cost will not outweigh their profits, they should avoid adding this department.