a memorandum from the owner of Movies Galore

The owner of Movies Galore argues that in order to cope with the recent decline in profits and create more revenue, all the stores that are branded by Movies Galore should embrace the strategies used in the Marston downtown area to lower the operation costs. However, the argument provided is porous and is liable to several challenging questions. Had the owner reviewed and adjusted this recommendation in consideration of the following points, he or she could make a more compelling case for it. To begin with, would it be possible that customers can actually afford higher prices? We know that it is an ordinary phenomenon of the economy that prices can grow chronically. Simultaneously, people may obtain a higher income thanks to the growth of the economy. Sometimes, people can accept that they are permitted to enjoy the same goods and services only if they pay more. The owner makes the assertion that raising prices is not a good option without citing any evidence, rendering the argument suspect. As it stands, there remains the possibility that rising prices may be in fact a feasible and sound business strategy. In this case, it might not be a disaster for Movies Galore to raise the rental fees slightly and reasonably. I suppose the owner has to conduct some surveys to see if people who patronize the stores regularly are happy to spend more on movies. If most of them are willing to rent movies even at higher prices, then I do not think that it is impossible to make more profits by setting higher prices. Even in cases where people are reluctant to do so, Movies Galore can still adopt insidious rises in prices. For example, they may charge a little more for hot movies and new movies, and set special bargains for unpopular ones. With these kinds of mild changes, Movies Galore might not experience a sudden wave of disappointment from their customers. Only in cases where all different methods to raise prices are ruled out, the owner can claim that raising rental fees is totally impractical. Even if limiting operational costs would be the only choice to increase profits, has the store in Marston made a wider profit margin with those strategies included? The memo does not include the outcome of strategies used in Marston. It is said that the operating fees are indeed successfully controlled, but we do not know whether a higher profit has been created. Would it be possible that most people are more likely to visit stores after 6 pm? Or is there a possibility that people who rent movies actually prefer old movies to new ones? If there would be positive answers to these questions, then the store in Marston could not have worked out an increase in profits. Consequently, it would not be an efficient way to introduce the identical procedures in other cities. Only if the Marston store did prosper and enjoy higher profits, then we could continue to discuss and consider the owner’s suggestion. Perhaps, the above methods are effective in Marston; still, we have to ask whether the same set of tools could be implemented in other cities. Residents in different cities are highly likely to possess various life habits and preferences for movies. Probably, people in Marston do not have colorful nights and are more inclined to hang out and select rental movies during the daytime. Also, they could be fans of new movies and not care about old ones. However, would people in other areas have the same likes? We just cannot know from the given memo. If other cities have a culture of enthusiasm for classical movies, then eliminating movies that came out 5 years ago would definitely be a bad idea in these places. Similarly, if the communities in other areas are more used to shopping in the evening, then reducing operating hours could turn out to be a risky move. Changing the open time in the same way as the Marston store does would make other stores miss the peak time in the day. To summarize, the owner needs to consider whether restricting operating payments is really the only choice to make profits. Only after having a positive answer to this question, could we continue to think about whether it is worth embracing their suggestions. In addition, we have to ask more questions on the efficacy of the involved means and whether it is sound or not to extrapolate the same means.