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sarasjain20
Joined: 22 May 2014
Last visit: 14 Jun 2018
Posts: 24
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Location: India
Schools: Kellogg '18 Oxford EMBA(Jan)"18 INSEAD Jan '17
GMAT 1: 560 Q46 V29
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21 Nov 2017, 05:31
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The following appeared in a memorandum from the vice president of Gigantis, a development company that builds and leases retail store facilities:
“Nationwide over the past five years, sales have increased significantly at outlet stores that deal exclusively in reduced-price merchandise. Therefore, we should publicize the new mall that we are building at Pleasantville as a central location for outlet shopping and rent store space only to outlet companies. By taking advantage of the success of outlet stores, this plan should help ensure full occupancy of the mall and enable us to recover quickly the costs of building the mall.”
The author concluded that Gigantis, a development company, needs to rent its space to outlet stores. To support his conclusion, he gives the two reasons : outlet stores, dealing exclusively in reduced price merchandise, have good sales, and success of stores will enable company in recovering its cost of building. The author's reasoning is flawed for couple of reasons.
First, In analysing the argument, the author oversimplified the situation. The author asserts that the only outlet stores are suffice to cover the full space and recover the cost of building.The author's assertion may be refuted if most of the outlet stores are already located in commercial area. As a result, outlet stores may not like to relocate. The author's business may get desired results if he follows a influential course of action. The author needs to attract a "mall genie" known as the anchor stores. For example, Timestyle mall, with exclusive range of such anchor stores as "seventh avenue" a largest retailer of London and a 12 floor snow skiing dome for indoor activity, has been attracting immense foot fall since last few years and thereby, attracting other retailers to occupy the mall space. In addition, the company should lease some space to entertainment and restaurant anchors. For instance, Sapphire mall leased some of its space to the chain of restaurants serving exclusive indo-western cuisine and to the theaters showing famous plays of time and therefore, generating a huge revenue and fame.
Second, the author assumes that if the company's mall at particular location such as Pleasantville becomes central location of outlet stores, it may take the advantages of its success.The authors fails to account that patrons may not travel at this location even if some good malls are there, because the company's mall is far away from nearby town markets. Consequently, mall may go dark after some time. For instance, White Flint, an upscale destination in washington suburbs, sits forlorn because patron gets the same stuff in nearby area.and thus patron avoids a long journey. Therefore, the company's mall may not able to catch immense foot fall. In this case, outlet stores's owners may not prefer to open their store at this location. In addition, if outlet stores's owners does not get the skilled staff required to maintain the store in suburb area, they will not like to move at this mall.
Finally, Only outlet stores may not occupy the full space and will enable the company to recoup its cost of building. The author needs to come up with different strategies in order to attract the patron and therefore may help to generate the revenue.
In conclusion, the author's recommendation is unpersuasive. It could be strengthened if the author follows the above mentioned strategies. In order to assess the merits of certain situation, It is essential to have knowledge of all contributing factors.
“Nationwide over the past five years, sales have increased significantly at outlet stores that deal exclusively in reduced-price merchandise. Therefore, we should publicize the new mall that we are building at Pleasantville as a central location for outlet shopping and rent store space only to outlet companies. By taking advantage of the success of outlet stores, this plan should help ensure full occupancy of the mall and enable us to recover quickly the costs of building the mall.”
The author concluded that Gigantis, a development company, needs to rent its space to outlet stores. To support his conclusion, he gives the two reasons : outlet stores, dealing exclusively in reduced price merchandise, have good sales, and success of stores will enable company in recovering its cost of building. The author's reasoning is flawed for couple of reasons.
First, In analysing the argument, the author oversimplified the situation. The author asserts that the only outlet stores are suffice to cover the full space and recover the cost of building.The author's assertion may be refuted if most of the outlet stores are already located in commercial area. As a result, outlet stores may not like to relocate. The author's business may get desired results if he follows a influential course of action. The author needs to attract a "mall genie" known as the anchor stores. For example, Timestyle mall, with exclusive range of such anchor stores as "seventh avenue" a largest retailer of London and a 12 floor snow skiing dome for indoor activity, has been attracting immense foot fall since last few years and thereby, attracting other retailers to occupy the mall space. In addition, the company should lease some space to entertainment and restaurant anchors. For instance, Sapphire mall leased some of its space to the chain of restaurants serving exclusive indo-western cuisine and to the theaters showing famous plays of time and therefore, generating a huge revenue and fame.
Second, the author assumes that if the company's mall at particular location such as Pleasantville becomes central location of outlet stores, it may take the advantages of its success.The authors fails to account that patrons may not travel at this location even if some good malls are there, because the company's mall is far away from nearby town markets. Consequently, mall may go dark after some time. For instance, White Flint, an upscale destination in washington suburbs, sits forlorn because patron gets the same stuff in nearby area.and thus patron avoids a long journey. Therefore, the company's mall may not able to catch immense foot fall. In this case, outlet stores's owners may not prefer to open their store at this location. In addition, if outlet stores's owners does not get the skilled staff required to maintain the store in suburb area, they will not like to move at this mall.
Finally, Only outlet stores may not occupy the full space and will enable the company to recoup its cost of building. The author needs to come up with different strategies in order to attract the patron and therefore may help to generate the revenue.
In conclusion, the author's recommendation is unpersuasive. It could be strengthened if the author follows the above mentioned strategies. In order to assess the merits of certain situation, It is essential to have knowledge of all contributing factors.
redabkf
Joined: 10 Jan 2018
Last visit: 06 Mar 2018
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19 Feb 2018, 15:55
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Please rate my AWA and provide me with your remarks.
Quote:
28 Jan 2022, 01:02
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Hi Sajjad1994, can you please rate my essay? Thanks!
The argument claims that the development company, Gigantis, would ensure full occupancy of the mall at Pleasantville and recover the costs of building the mall by publicizing the new mall as a central location for outlet shopping and rent store space only to outlet companies. Stated in this way, the argument reveals examples of leap of faith and poor reasoning. The conclusion of the argument relies on assumptions for which there is no evidence. Hence, the argument is unconvincing and has several flaws.
First, the argument readily assumes that increased sales at outlet stores implies increased profits. This statement is a stretch. For instance, The evidence mentioned clearly indicates that sales have increased at outlet stores that deal exclusively in reduced-price merchandise. Clearly, these outlet stores may not be making great profits by selling at a discounted price. The argument could have been much clearer if it explicitly mentioned that these reduced-price outlets make significant profits enough to cover costs of the mall.
Second, the argument claims that renting to outlet companies should ensure full mall occupancy and recovery of building costs. This is again a very weak and unsupported claim as the argument does not demonstrate any correlation between outlet companies selling discounted merchandise and profits earned by these outlets. To illustrate, there might be outlet companies rented at the mall which might, though profitable, have low business volume and profits. While, a full occupancy mall might indicate thriving business, it need not necessarily mean corresponding profits. If the argument had provided evidence that a fully occupant mall with outlet stores would help recover building costs, then the argument would have been a lot more convincing.
Finally, has the author considered renting space to non-outlet companies that have thriving business to generate revenue and recover costs? Also, is the location of the mall at Pleasantville suitable for increasing sales? Without convincing answers to these questions, one is left with an impression that the claim is more wishful thinking than substantive evidence.
In conclusion, the argument is flawed for the above mentioned reasons and is therefore, unconvincing. It could be considerably strengthened if it had clearly mentioned all the relevant facts, such as correlation between discounted outlet stores and profitability. In order to assess the merits of the claim that the new mall would ensure full occupancy and recover building costs, it is essential to have full knowledge of above mentioned contributing factors. Without this information, the argument remains unsubstantiated and open to debate.
The argument claims that the development company, Gigantis, would ensure full occupancy of the mall at Pleasantville and recover the costs of building the mall by publicizing the new mall as a central location for outlet shopping and rent store space only to outlet companies. Stated in this way, the argument reveals examples of leap of faith and poor reasoning. The conclusion of the argument relies on assumptions for which there is no evidence. Hence, the argument is unconvincing and has several flaws.
First, the argument readily assumes that increased sales at outlet stores implies increased profits. This statement is a stretch. For instance, The evidence mentioned clearly indicates that sales have increased at outlet stores that deal exclusively in reduced-price merchandise. Clearly, these outlet stores may not be making great profits by selling at a discounted price. The argument could have been much clearer if it explicitly mentioned that these reduced-price outlets make significant profits enough to cover costs of the mall.
Second, the argument claims that renting to outlet companies should ensure full mall occupancy and recovery of building costs. This is again a very weak and unsupported claim as the argument does not demonstrate any correlation between outlet companies selling discounted merchandise and profits earned by these outlets. To illustrate, there might be outlet companies rented at the mall which might, though profitable, have low business volume and profits. While, a full occupancy mall might indicate thriving business, it need not necessarily mean corresponding profits. If the argument had provided evidence that a fully occupant mall with outlet stores would help recover building costs, then the argument would have been a lot more convincing.
Finally, has the author considered renting space to non-outlet companies that have thriving business to generate revenue and recover costs? Also, is the location of the mall at Pleasantville suitable for increasing sales? Without convincing answers to these questions, one is left with an impression that the claim is more wishful thinking than substantive evidence.
In conclusion, the argument is flawed for the above mentioned reasons and is therefore, unconvincing. It could be considerably strengthened if it had clearly mentioned all the relevant facts, such as correlation between discounted outlet stores and profitability. In order to assess the merits of the claim that the new mall would ensure full occupancy and recover building costs, it is essential to have full knowledge of above mentioned contributing factors. Without this information, the argument remains unsubstantiated and open to debate.
