▶ Your Answer :
In the
given article, it is recommended that Movies Galore should decrease its
operating cost by reducing open time and its movie stocks launched more than
five years ago in order to increase its revenue. Despite its seemingly logical
argument, the author’s claim is based on some assumptions which raise numerous
questions. Proper information answering those questions should be provided in
order to assess the author’s recommendation adequately.
First of all, the author’s presumption that
increasing video rental price is not a good way to increase profit might not be
true. Raising its video rental fee might not damage its character of special
bargains. For example, average price in the country might have been largely
increasing. As people become used to increased price of all other products and
services, they might not consider the rental price raising a great change.
Another possibility is that current rental fee of Movies Galore has been
significantly lower than other video rental companies that they might remain the cheapest rental company even
when they increase the price to a certain degree. Thus, the doubt that
increasing video rental price will not have a large influence on its own
attraction of low price should be answered to be wrong in order to strengthen
the author’s assertion.
Similarly
critical is the question whether reputation for low-price rental of great
movies will continue when they eliminate all movie stocks older than five
years. Since people’s favor on the movies is not only a temporary preference,
they might look for old movies in video rental shops. For example, Titanic, a
famous film directed by James Cameron, still has a great reputation of its story
and the scenes which are not only beautiful but also largely sad. Even though
it was released tens of years ago, people still want to watch the movie. When
Movies Galore forgoes keeping the old movie stocks, they might suffer from
noticeable decline in the number of customers who want to watch classical
movies. When this possibility is proven warranted, the author’s claim might be
significantly weakened.
Moreover,
even if above questions are properly answered, it is still not validated
whether the recommended change will lead to a notable profit growth. Since reduction
of movie stocks means decreased range of movie choice, the amount of movie
rental might decline simultaneously. In addition, closing earlier might result
in notable decrease in the number of customer. If people prefer borrowing movie
videos in their way home after their work, they might not have chances to enter
the Movies Galore rental shop because it is close after 6pm. Considering that
profit is calculated with both sales and cost, cost reduction cannot be
directly connected to the profit increase when sales decreases in the same
time. Therefore, the answer for the question whether recommended change will
lead to a profit growth have a critical role in determining the validity of the
author’s claim.
In
sum, certainty of the author’s conclusion hinges on those questions above and
cannot be adequately assessed without further data provided by their answers.
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