The following appeared in a memorandum from the owner of Movies Galore, a chain of video rental stores.
“In order to reverse the recent decline in our profits, we must reduce operating expenses at Movies Galore’s ten video rental stores. Since we are famous for our special bargains, raising our rental prices is not a viable way to improve profits. Last month our store in downtown Marston significantly decreased its operating expenses by closing at 6:00 P.M. rather than 9:00 P.M. and by reducing its stock by eliminating all movies released more than five years ago. Therefore, in order to increase profits without jeopardizing our reputation for offering great movies at low prices, we recommend implementing similar changes in our other nine Movies Galore stores.”
Write a response in which you discuss what questions would need to be answered in order to decide whether the recommendation is likely to have the predicted result. Be sure to explain how the answers to these questions would help to evaluate the recommendation.
The memorandum by the owner of Movies Galore paints an all-too-familiar picture of the state of the present day video rental industry, and while the situation and timeline may be different at the time he made this statement, the owner should not make a decision on whether reducing operating expenses is the best way forward without further investigation.
In order to combat Movies Galore's recent decline in profits, the owner has stated that nine out of ten of his stores should adopt the model that piloted in its downtown store: closing early and reducing video selection. While this change has succeeded in his stated goal of significantly decreasing operating cost, it is important to remember that his ultimate aim is to reverse Movies Galore's shrinking profits. With this in mind, the missing piece of the puzzle is whether these changes have negatively impacted revenue moreso than they have improved operating costs. If Movies Galore closes at 6pm instead of 9pm, it is possible that they are alienating customers who wishes to stop by after work and dinner to pick up a movie for the night. Similarly, eliminating the selection of older movies can also drive the customer to look for their favorite classic somewhere else, either at another store or online with entertainment providers such as Netflix. Once a customer finds another entertainment provider with a better selection, it is unlikely that they will come back to Movies Galore without further special bargains, which would reduce revenue even further.
While the caveats listed above are worth considering, they do not spell a definitive "no" for the owner's suggestion to implement changes to the rest of the Movie Galore chain similar to the one described for its downtown Marston location. If the changes has indeed brought down operating costs without significantly detrimenting the revenue, then it may be worth considering for the other stores. However, the owner may wish to exercise caution when extrapolating the downtown Marston case, even if it has proved to be successful. It may be the case that there is less competitors downtown and people have no choice but to adapt to the changes of the Marston store if they wish to watch a movie; however, this may not be true for suburban spaces with a mega-chainstore competing for the same business. What does not hurt revenue downtown may cut into revenue deeply in other places. Thus, the owner should investigate whether the customers of different stores may react differently to changes in the hours and selection.
Finally, it is worth mentioning that there are other ways of increasing profits besides cutting operating costs. The owner should explore alternative expansionary operations - such as increased marketing, enhanced services, more product selection, and perhaps an expansion into offering products through a different medium (e.g. online video rentals) - for two reasons. First, while expansionary strategies tend to increase operating costs in the short run, they can be a boon for the company in the long run. Second, by increasing presence of Movie Galore through various expansionary tactics, Movie Galore can potentially rebrand itself away from being a discount bargain store, and charge higher prices, ultimately increasing profits and profit margin. It is important for the owner not to get stuck on the notion that operating expenses is the only way to achieve his profit maximization goal, and to explore alternatives that may offer Movie Galore a much brighter future.
| Post date | Users | Rates | Link to Content |
|---|---|---|---|
| 2019-11-26 | NRS | 50 | view |
| 2019-11-15 | sinamalakouti | 55 | view |
| 2019-10-19 | suyash12mahar | 69 | view |
| 2019-09-19 | fernanf | 59 | view |
| 2019-09-19 | kkkk_kkkk | 43 | view |
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Grammar and spelling errors:
Line 5, column 109, Rule ID: POSSESIVE_APOSTROPHE[1]
Message: Possible typo: apostrophe is missing. Did you mean 'owners'' or 'owner's'?
Suggestion: owners'; owner's
...ell a definitive 'no' for the owners suggestion to implement changes to the ...
^^^^^^
Line 5, column 566, Rule ID: THERE_S_MANY[4]
Message: Did you mean 'there are less competitors'?
Suggestion: there are less competitors
... be successful. It may be the case that there is less competitors downtown and people have no choice but ...
^^^^^^^^^^^^^^^^^^^^^^^^^
Line 5, column 575, Rule ID: FEWER_LESS[2]
Message: Did you mean 'fewer'? The noun competitors is countable.
Suggestion: fewer
...ssful. It may be the case that there is less competitors downtown and people have no...
^^^^
Discourse Markers used:
['also', 'besides', 'but', 'e.g.', 'finally', 'first', 'however', 'if', 'look', 'may', 'second', 'similarly', 'so', 'then', 'thus', 'while', 'such as']
Attributes: Values AverageValues Percentages(Values/AverageValues)% => Comments
Performance in Part of Speech:
Nouns: 0.2672 0.25644967241 104% => OK
Verbs: 0.1472 0.15541462614 95% => OK
Adjectives: 0.0816 0.0836205057962 98% => OK
Adverbs: 0.0544 0.0520304965353 105% => OK
Pronouns: 0.0368 0.0272364105082 135% => Less pronouns wanted. Try not to use 'you, I, they, he...' as the subject of a sentence
Prepositions: 0.1264 0.125424944231 101% => OK
Participles: 0.0432 0.0416121511921 104% => OK
Conjunctions: 2.78696546817 2.79052419416 100% => OK
Infinitives: 0.032 0.026700313972 120% => OK
Particles: 0.0032 0.001811407834 177% => OK
Determiners: 0.0976 0.113004496875 86% => OK
Modal_auxiliary: 0.0272 0.0255425247493 106% => OK
WH_determiners: 0.0096 0.0127820249294 75% => OK
Vocabulary words and sentences:
No of characters: 3542.0 2731.13054187 130% => OK
No of words: 571.0 446.07635468 128% => OK
Chars per words: 6.20315236427 6.12365571057 101% => OK
Fourth root words length: 4.88831323574 4.57801047555 107% => OK
words length more than 5 chars: 0.408056042032 0.378187486979 108% => OK
words length more than 6 chars: 0.306479859895 0.287650121315 107% => OK
words length more than 7 chars: 0.199649737303 0.208842608468 96% => OK
words length more than 8 chars: 0.129597197898 0.135150697306 96% => OK
Word Length SD: 2.78696546817 2.79052419416 100% => OK
Unique words: 299.0 207.018472906 144% => OK
Unique words percentage: 0.523642732049 0.469332199767 112% => OK
Word variations: 65.3986169562 52.1807786196 125% => OK
How many sentences: 19.0 20.039408867 95% => OK
Sentence length: 30.0526315789 23.2022227129 130% => OK
Sentence length SD: 70.7016673196 57.7814097925 122% => OK
Chars per sentence: 186.421052632 141.986410481 131% => OK
Words per sentence: 30.0526315789 23.2022227129 130% => OK
Discourse Markers: 0.894736842105 0.724660767414 123% => OK
Paragraphs: 4.0 5.14285714286 78% => OK
Language errors: 3.0 3.58251231527 84% => OK
Readability: 60.7006175684 51.9672348444 117% => OK
Elegance: 1.8322147651 1.8405768891 100% => OK
Coherence and Cohesion:
Essay topic to essay body coherence: 0.427853608347 0.441005458295 97% => OK
Sentence sentence coherence: 0.11828958983 0.135418324435 87% => OK
Sentence sentence coherence SD: 0.102046440079 0.0829849096947 123% => OK
Sentence paragraph coherence: 0.51263428558 0.58762219726 87% => OK
Sentence paragraph coherence SD: 0.19258688407 0.147661913831 130% => OK
Sentence topic coherence: 0.157851854741 0.193483328276 82% => OK
Sentence topic coherence SD: 0.0920845998639 0.0970749176394 95% => OK
Paragraph paragraph coherence: 0.396872657888 0.42659136922 93% => OK
Paragraph paragraph coherence SD: 0.0533129334252 0.0774707102158 69% => OK
Paragraph topic coherence: 0.302080517595 0.312017818177 97% => OK
Paragraph topic coherence SD: 0.0415989654269 0.0698173142475 60% => The ideas may be duplicated in paragraphs.
Task Achievement:
Sentences with positive sentiment : 15.0 8.33743842365 180% => OK
Sentences with negative sentiment : 2.0 6.87684729064 29% => OK
Sentences with neutral sentiment: 2.0 4.82512315271 41% => OK
Positive topic words: 13.0 6.46551724138 201% => OK
Negative topic words: 2.0 5.36822660099 37% => OK
Neutral topic words: 1.0 2.82389162562 35% => OK
Total topic words: 16.0 14.657635468 109% => OK
What are sentences with positive/Negative/neutral sentiment?
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Rates: 58.33 out of 100
Scores by essay e-grader: 3.5 Out of 6 -- The score is based on the average performance of 20,000 argument essays. This e-grader is not smart enough to check on arguments.
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Note: This is not the final score. The e-grader does NOT examine the meaning of words and ideas. VIP users will receive further evaluations by advanced module of e-grader and human graders.