The following appeared in a memorandum from the owner of Movies Galore, a chain of movie-rental stores."In order to reverse the recent decline in our profits, we must reduce operating expenses at Movies Galore's ten movie-rental stores. Since we are famou

The given excerpt is a memorandum from the owner of a famous chain of video stores trying to recommend the ways in which the company could reduce their operating expenses and reverse the effect of the recent decline in profits. The author's analysis might be plausible but there are a few questions that need to be answered for implementing the suggested changes in the stores, the major ones are as follows:

Firstly, a deeper analysis is demanded to find out the very cause of the decline in the company's revenue in the recent times. Is is due to current economics or only some of the stores are bearing losses or it is a common issue faced by all the stores? The author suggests that to increase the profit they must cut the operational expenses at all the ten video stores which might be one of the possible ways to bring about the change. Also, he reasonably qualifies that increasing the rentals is not recommended as it could hurt their reputation as a low cost provider.

To support his stand, the owner provides the results of one of the stores located in the city of Marston. The store witnessed a reduced operational expenses by early closure and removing old inventory from the store. However, the author needs to validate that such a strategy would work on all of the other nine stores as well. The differences in people's demands in different regions would have to be analysed and a survey could be an option. There are some communities that prefer old movies than new ones and surely such an strategy would be counterproductive.

Similarly, the 6pm shut down in a metro city would not be effective as most people shop after office hours and hence there is chance of drop in sales. One strategy that is effective in one region might not work in another. A proper cause-effect study needs to be performed for such a decision.

Finally, the author suggests that the same policy must be implemented in other stores however he must walk the talk and back his claims of recovery in monetary values. what increase in profit is expected in what time? Providing such targets would help the business to be more focused and help the author's case.

Hence, the above questions must be answered in order to confidently implement changes in the stores and achieve the predicted results and maintaining their reputation at the same time.