GMAT : Analysis of An Argument
44. The following is part of a business plan created by the management of the Megamart grocery 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 supply 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 underline 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 in conclusion.
The management of the Megamart grocery store concludes that adding new departments and services is the surest way to increase profits over the next couple of years. They are led to this conclusion because of a 20 percent increase in total sales which was realized after the addition of a pharmacy section to the grocery store.
On the basis of this experience, they conclude that the convenience of one-stop shopping is the main concern of their customers.
The management's argument is faulty in several respects.
In the first place, the management assumes that the increase in total sales was due to the addition of the pharmacy section. However, the only evidence offered to support this conclusion is the fact that the addition of the pharmacy preceded the increase in sales. But the mere fact that the pharmacy section was added before the increase occurred is insufficient grounds to conclude that it was solely responsible for the increase. Many other factors could have brought about this same result. Lacking a detailed analysis of the source of the sales increase, it would be wrong to attribute the increase only to the addition of the pharmacy section.
In the second place, even if it were the case, this fact alone is insufficient to support the claim that adding additional departments will increase sales even further. It is quite possible that the addition of the pharmacy section increased sales simply because there was no other pharmacy in the vicinity. The additional proposed departments and services, on the other hand, might be well represented in the area and their addition might not have a significant impact on the profits of the store.
In other words, there may be relevant differences between the pharmacy section and the additional proposed sections that preclude them from having a similar effect on the sales of the store.
In conclusion, the management's argument is not based on conclusive evidence. To strengthen the conclusion, the management must provide additional evidence linking the addition of the pharmacy section to the increase in total sales. It must also show that there are no exceptional reasons for the sales increase due to the pharmacy section that would not apply to the other proposed additions.