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.

Answer:

In this proposal, Monarch Books’ Board of Directors is encouraging the store to open a cafe and claim this will attract more customers. At first, this may seem like a lucrative idea, however, additional information is required to determine whether Monarch Books should open a cafe in its store.

Firstly, the recommendation assumes that because Regal Books successfully attracted more customers after opening a cafe, Monarch Books will too. This begs the question, how similar are Monarch and Regal books? The case could be that Monarch Books is located in a very remote area, thus opening a cafe may not be enough of an incentive to encourage customers from out of town to visit the store. However, if both Monarch Books and Regal Books reside in similar towns, then perhaps opening a cafe within the store may help increase business.

Second, one must question the validity of the recent national census. How representative is the sample of the population and how closely does it correlate to the population of the town in which Monarch Books operates? Monarch Books may be in a town with a respectable amount of children under ten; discontinuing the children’s book section may result in financial ruin and actually discourage customers with children from visiting the store. To go one step further, what exactly does a significant decline mean? Perhaps this may only be a 2 or 3% decline, which may have little or no impact on the children’s population in Monarch Books’ town.

To continue, it will prove beneficial to determine whether or not there are cafes near Monarch books. If Monarch Books is near a cafe, then building one within the store is unnecessary. New customers who otherwise would not enter the bookstore will most likely still purchase coffee or tea at the nearby cafe instead of coming to Monarch Books. However, if there are no cafes near the store, then perhaps customers will opt to purchase beverages at Monarch Books and hopefully, stay long enough to buy a book as well.

Lastly, it is important to understand whether or not Monarch Books even has the funds for building a cafe inside its store. The recommendation assumes the store is financially capable of opening a cafe, however, perhaps Monarch Books does not have sufficient funds to pursue this venture. If the store is desperately looking for ways to increase customer turnout, then perhaps the store may already be in financial trouble. In this case, Monarch Books should consider alternatives to increasing customer turnout, such as utilizing social media to attract attention.

All in all, the board’s recommendation may have merit, however, it is important to answer the questions above to gain a better understanding of the situation.



(Any guidance on the above answer will be much appreciated! I am fairly new to this forum so if there are any errors in the post please let me know.)