Based on the fact that in the Park Hill district, 3 businesses increased their profits at two
years ago, the author believed that 3 identical new businesses will succeed in another district
and that by applying discount program, company will maximize its return. However, close scrutiny
reveals that this fact lends little credible support for the author’s conclusion for several
reasons and reasoning failure.
In the first place, it is highly doubtful that in the future, the 3 new businesses will
experience similar fate of the past 3 business. Data draw from history record is doubling to
convince me that success of past business is replicated to the new business. Lacking enough
information, I have a good reason to suspect that customer might have changed their preference
of movie, pizza and golf during the 2 years. If it is the case, the new theater, pizza restaurant
and golf club have a high probability to suffer lose. As a result, the author’s conclusion is
undermined by the possibility. Thus, without providing causal explanation and considering
alternative possibilities, the conclusion is ill-founded.
Second, the author seems to assume that the market situation in Park Hill district is the same
as in the Iron gate district. The 3 old businesses operation are applicable to that of new
ones. Clearly, differences between these two districts overweight their similarities. There are
many factors, such customer behavior and people revenue, are just as like to be dramatically
different. For instance, business competition in the Park Hill district is highly fierce, but
absent in the Iron gate district. Consequently, the author cannot justify his conclusion unless
more reason and analysis is given to confirm the comparison between two districts.
Finally, in asserting the conclusion that new business is profitable to invest and earn return,
the author recommend the program that promoting customer to consume in 3 new business by
providing discount to people who have consumed in the two of the three new stores. Even though
the discount will motivate consumer to patronize, revenue for each business is not necessarily
increased. Without calculating the difference of revenue loss of discount and improved revenue,
the result of maximize profits is unwarranted.
In sum, it is imprudent for author to draw his conclusion simply on the basis of the fact and
analysis. To solidify the conclusion, the author has to prove the history record have a meaning
in helping investor to make a decision. In addition, the author should provide evidence and
explain the reasonable comparison of two districts. Moreover, function of discount should be
explained more detailed.