In order to reverse the recent decline in our profits, we must reduce operating expenses at Movies Galore’s ten video rental stores. Since we are famous for our special bargains, raising our rental prices is not a viable way to improve profits.

In order to reverse the recent decline in our profits, we must reduce operating expenses at Movies Galore’s ten video rental stores. Since we are famous for our special bargains, raising our rental prices is not a viable way to improve profits.

To increase the profits of Movies Galore by reducing the operating expense, the owner proposed some plausible recommendation such as reducing the opening time by three hours and removing the old movies which were published over five years or even more. There are serval vital questions needed to be proved whether these strategies are suitable for every ten video rental stores in different places. Besides, it has only operated these new rules for a month, which is not enough to prove that they could be helpful to increase the profits benefit.

First of all, these new measures have only trialled in the store built in downtown Marston. The rest of Movies Galore stores, for example, is constructed in suburb or countryside where the structure of population, more aged people lives in suburb than in city center, and the life style, people living in country mostly enjoy their life rather than making money, is considerably different from those in downtown. So maybe, for one case, those who live in suburb or countryside are more likely to enjoy the old movies or spend after dinner time on searching some funny movies in video rental stores. It is true that eliminating all movies more than five years old surely cuts the operating expenses, however in communities where the different stores are located people’s interest of movies is not the same, which will possibly influence the number of the tenants.

Second, only operating for a month cannot prove that these change could improve the profits. It should take a long time to judge a business activity whether it is efficacious. It is best to have a one-year observation to make sure if these changes are feasible. Because in different time during a year, the consumers will exhibit significantly different demand, for instance, in summer, except the equator ares, sunset time is later than that in winter and also the temperature in the evening is good for outdoor activities, which probably results in the number of the customers is more than any other time from 6:00 P.M. to 9:00 P.M. leading to a great income in that time. So cutting down the opening time might decrease the operating expense in some period, but it is not sure for a whole year.

Overall, whether applies the owners’ advices to all Movies Galore stores, more research still need to be done. A successful business event should not just consider the side of suppliers, but also it is greatly important to find out what the true demand consumers ask for, which helps to cut off the unnecessary cost.