Discuss how well reasoned you find below argument
“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.”
Response:
The argument that the surest way to increase profits over the next years will be to add different sections or to diversify, as observed from the increase in total sales from addition of the pharmacy section, is flawed.
First, sales is a top-line figure which meant that profitability could not be based solely from it. To illustrate, an increase in sale coupled with the same increase in cost will result to breakeven (i.e., profit is just enough to cover the cost); hence, is not really profitable. Conversely, a major increase in sale coupled with lower costs incurred would be profitable. These factors were not mentioned in the argument making it weak. Second, there was a lack of support showing that the increase in sale is due to the addition of the pharmacy store. There are some other factors that could increase sale such as economic factors, pricing, competitors, etc. However, these were not mentioned in the argument. Third, the term ‘surest’ way to increase profit is vague as these were not backed up appropriately. In fact, one data point could not determine or identify a trend. Lastly, saying that it is a competitive advantage since it would be the only store in the area to offer such range of services is a near-sighted claim as it assumes that other stores would not offer the same services in the next few years. It also lacks a solid basis for its forecast or projection.
The argument could then be strengthened by including costs for other services to determine profitability, show support that the increase in sale is due to the addition of pharmacy store, offer a variety of scenarios or ways to increase profit which are backed up by trends from multiple data points and including a solid basis for its forecast. These are necessary to address the foregoing flaws. Otherwise, it would remain flawed.