Dinámica de la contienda política: un nuevo programa de estudio

The following is part of a business plan created by the management of the Megamart gro-cery 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.

Understand the argument

The management of Megamart grocery store has tabled a business plan that proposes addition of new departments and services on the grounds that this is the surest way to increase profits over the next couple of years. The business plan has drawn from the recent 20 percent increase in sales after the store added a pharmacy section. The management argues that customers are lured by the convenience of shopping under one roof and hence it is prudent to keep adding new sections to the store in order to increase profits.

Faulty assumptions

• Increase in sales implies increase in profits

• The 20 percent increase in sales over last year’s is not natural for the grocery store

• The hike in sales is completely a consequence of the addition of the pharmacy section

• The proposed new sections are similar to the pharmacy section so as to have a similar (positive) effect on sales

• Adding these sections is financially viable for the store

• Customers will not flock to a competing store that specializes in one of the new sections and offers better prices

Missing evidence

• Proof that increasing sales will translate into increasing profits

• Proof that the addition of the pharmacy store is the sole reason for the increase in sales

• Proof that the proposed sections are all similar to pharmacy in business prospects and will result in an increase in sales

• Proof that the cost of adding these sections will not outweigh the increase in sales

• Proof that customers indeed only seek the convenience of one-stop shopping

Counter-examples

• What if increase in sales is accompanied by a proportionate increase in costs as well?

• What if the increase in sales was not a direct result of the addition of the pharmacy section?

• What if the proposed new sections do not have a market in the said area?

• What if it is very expensive to set up and diversify into some of these new sections?

• What if the customers rate value for money higher than the convenience of one-stop shopping?

The essay

The management of Megamart Grocery Store has come up with a business plan of adding new sections and departments in order to increase profits. This decision comes on the heels of a 20 percent increase in sales following the addition of a pharmacy section to the store. Basing this success, the management concludes that customers look for convenience of one-stop shop-ping and hence it makes sense to add a variety of sections to its grocery store. Such a move will give a competitive edge to the store and also help in increasing profits. Apart from the fact that the management confuses increase in sales with increase in profits, the argument also lacks logic in that it doesn’t provide substantial evidence to support the proposed measures.

To begin with, the argument only states that there was an increase in sales after the store added a pharmacy section. This doesn’t say anything about the contribution of the pharmacy section in the increased sales. Nor does this preclude the possibility of the increased sales coming from efforts in the grocery section such as huge discounts, addition of new stock, shut down of competing grocery store, etc. Simply because the addition of the pharmacy section preceded the hike in sales, doesn’t mean that the two share a cause and effect relationship.

Moreover, it is also likely that this 20 percent increase is not that big a number at all. Proba-bly the store in general grows by similar percentages and the addition of the pharmacy store happened to coincide with the increase.

Examining the argument further, one can uncover various other loopholes. Firstly, increase in sales necessarily do not imply increase in profits. Setting up new departments and sections will incur costs and it is likely that the increased sales may not translate into increased profits.

Secondly, even if one gives in to the fact the increase in sales can be owed to the addition of the pharmacy section, it cannot be guaranteed that the addition of the proposed new departments will also result in success. It is likely that the pharmacy and these other departments differ

highly in terms of the business prospects they offer. It is also possible that setting up these departments doesn’t prove financially viable for the store. Further, the area may not have the kind of customer demographic to which these new sections may appeal. Hence, one cannot for certain conclude that the addition of new departments will result in increased sales and/or profits. Finally, the premise that customers are mainly concerned with convenience in shop-ping is also unsubstantiated. The argument is silent on how customers will react to a specialty store opened next door that may offer a variety of products in a particular category at low prices. It is under these circumstances that the assertion of customers rating convenience as supreme will be testified.

The entire discussion boils down to the fact the management needs to take a closer look at what caused the increase in sales and whether this increase actually resulted in profits. The management also needs to assess if adding new departments and sections is cost effective and if these additions will indeed bring in more profits. Only when the management delves into all these aspects should the decision of adding new departments to the store be taken.