The following appeared in a memo from the president of Bower Builders, a company that constructs new homes.A nationwide survey reveals that the two most-desired home features are a large family room and a large, well- appointed kitchen. A number of homes

The president of Bower Builders makes an argument for increase in size of family rooms and kitchens in all the homes to boost profitability and sales. He supports his argument by quoting a national survey about consumer preferences and comparing the business of a competitor. However, in order for the argument to hold good, there is need to critically analyze a number of assumptions made in its premises.

Firstly, there is assumption that national survey conducted is really reflective of customer preferences. There is scope that survey was conducted on a very narrow sample size involving few well off and rich customers having large family size. It may not reflect the preferences of middle class owners and small nuclear families. If it is so, then the assumption about survey would be unwarranted and it might adversely affect the business of the company .

Secondly, there is the assumption that homes built by the competitor Domus constructions with the above mentioned features target the same group of customers as the Bower Builders and they are very large target group with adequate demand potential. If it were so and since they sell much faster and get higher price then the argument is good. On the other hand if the basic assumption is false and they are merely trying to replicate model of competitor which caters to some group of customers who are different from the company's core customers then it may backfire. It might be that the customers purchasing homes with given features is very narrow and by replicating the model, the the number of homes will increase without adequate demand. This might have detrimental affect on sales and profits.

Thirdly, there is assumption that the changes made will boost sales and profits . It may be that the changes required involve significant expenses and potential gain due to higher prices fetched may be offset by higher expenditures involved. This would in turn make assumption unwarranted and argument flawed.

Finally, there is assumption is made from preferences of recent buyers that small dining rooms can be used to accommodate the increase in spaces of kitchen and family rooms. It may be that recent buyers are a very small sample of large customer size that company attracts. Furthermore, making changes based on small customer sample without adequate backing from any survey can be counter productive. Even the national survey does not say anything about dining room size.

In conclusion, a lot more information is required for the assumptions made in the memo to be warranted and resulting argument to be valid.