The following is a recommendation from the Board of Directors of Monarch Books.


"We recommend that Monarch Books open a café in its store. Monarch, having been in business at the same location for more than twenty years, has a large customer base because it is known for its wide selection of books on all subjects. Clearly, opening the café would attract more customers. Space could be made for the café by discontinuing the children's book section, which will probably become less popular given that the most recent national census indicated a significant decline in the percentage of the population under age ten. Opening a café will allow Monarch to attract more customers and better compete with Regal Books, which recently opened its own café."


Write a response in which you discuss what questions would need to be answered in order to decide whether the recommendation is likely to have the predicted result. Be sure to explain how the answers to these questions would help to evaluate the recommendation.




The board of directors of Monarch Books proposes that the store should open a Café in the store to attract more customers to visit the store. The opinion of board of directors seems to be convincing at a glance because installing new facilities may give customers more reasons to visit the bookstore. However, several questions need to be answered to substantiate its proposal.
First, the question whether the national census can be interpreted same in the region where the bookstore located should be answered. the census only says about the national demographic status, not on the certain regions. The region the bookstore located may have a lot of portion for the children in the regional population, which may lead to the high sales of children books. In this case, eradicating section for the children books to set up a new Café does not guarantee visits from more customers.
Second, the board of directors should answer to the question that the Café has an only positive effect on the increment of customers. For example, Because the books are cultural products like movies and acts, some customers may want to focus only on their books without being interfered by any sense such as coffee smell. As it is very usual case that theaters, to prevent smells, prohibit visitors to bring some foods, the bookstore may have similar cases. Thus, Café may have some negative effect on attracting more customers, which can result in the decline of the number of customers.
Lastly, it is questionable that following opponent’s strategy would lead the bookstore to have more customers which may mislead it to the loss of comparative advantage. In the community where bookstore exists, customers can choose two kinds of bookstores; one has café, the other does not have the café. There are no data on the preference of customers so that we cannot say that consumers will choose Regal Books more than Monarch Books than before. Instead, Monarch Books can have more customers in case of the strategy to have café is a wrong choice.
Having a café in the bookstore may give customers more fun and experience in the bookstore, which can cause more customers in the bookstore. However, the questions above should be answered before installing a new café in the Monarch Books to ensure that the increase of customers really happens.