The following appeared in a memorandum from the owner of Movies Galore, a chain of movie-rental stores."Because of declining profits, we must reduce operating expenses at Movies Galore's ten movie-rental stores. Raising prices is not a good option, since

While it may be true that the profits of Movies Galore are declining and that they should take action to resolve this issue, the author does not present a completely cogent case about the reasons and recommendations for this problem. And his arguments would benefit from evidence to substantiate his claims and business plan.

The author first state that the profits have been declining and suggests that the operating expenses should be reduced. However, he does not clarify which of his stores presents the declining, or if they all are. If the declining profits were only present in certain stores, it would be easier to manage the problem in those stores instead of applying a single solution to all of them, which could in fact be counterproductive for the stores operating with good profits.

As part of the solution, the owner says that they should reduce their operating hours in all of Movies Galore’s stores, and then he states that this measure was adopted already by their downtown store, which now closes at 6:00 p.m. instead that their previous 9:00 p.m. schedule, and their also stopped stocking any DVD released more than five years ago. In this case, the author does not provide any data about the success of this policy. If the profits of the downtown store were reduced instead of improved, the viability of this solution would fall apart.

Furthermore, the author does not take into account the difference between the stores. If the policy resulted successful in the downtown store, it does not mean it would have the same positive impact on the other stores. Maybe this schedule works for the downtown store because those are the hours in which more people are at downtown. If the customers lived in other locations such as the suburbs, a reduction in the operating hours could diminish the rentals if the residents arrived to their homes in the late afternoon or night. A survey among their customers in each store could help with the establishment of a good individual schedule.

Finally, the author states that there has been very few complaints about these policies, but such a statement is not clear enough to determine if those complaints are significant. It could be that there are not many complaints because the new schedule does not permit the customers with complaints to go and deliver them. Moreover, the adoption of these policies in every store does not guarantee the improvement of the profits overall or per store.

In conclusion, the owner should substantiate his claims with stronger evidence in order to define the better way to ameliorate his profits. An individual study in each store and the results in the downtown branch could benefit his arguments and help him hinder the losses and ascend the number of rentals and his profits.