A3. The following appeared in a memorandum from the development director of the Largo Piano Company. “The Largo Piano Company has long been known for producing carefully handcrafted, expensive pianos used by leading concert pianists. During the past few years, however, our revenues have declined; meanwhile, the Allegro Musical Instrument Company introduced a line of inexpensive digital pianos and then saw its revenues increase. In order to increase Largo’s sales and in fact outsell Allegro, we should introduce a line of digital pianos in a variety of price ranges. Our digital pianos would be likely to find instant acceptance with customers, since they would be associated with the prestigious Largo name.”
In this argument the author concludes that the Largo Piano Company introduce a line of inexpensive digital pianos in order to increase its revenues. The conclusion is based on two facts: (1) declined revenues of the Largo Piano Company during the past few years, and (2) increased revenues of the Allegro Musical Instrument Company after its introduction of inexpensive digital pianos. The argument is unconvincing because it suffers from two critical flaws. To begin with, this argument is a classic instance of “after this, therefore because of this” reasoning. The mere fact that the introduction of digital pianos preceded the increase in the revenues is insufficient to conclude that it was the cause of this event. Many other factors could bring about this same result. For example, the Allegro Musical Instrument Company may have other strategies such as broaden customer groups, decrease labor costs, all of which can lead to the increase of revenues. Lacking a detailed analysis of the source of the sales increase, it would be extremely biased and unreliable. Second, it is highly doubtful that the facts drawn from the Allegro Musical Instrument Company are applicable to the Largo Piano Company. Differences between the two companies clearly outweigh the similarities, thus making the analogy highly suspect. For example, the Largo Piano Company have a customer group of leading concert pianists which is totally different with that of the Allegro Musical Instrument Company. In other words, there may be relevant differences between the two companies that preclude them from having a similar effect on the sales of the pianos. In conclusion, the recommendation that the Largo Piano Company introduce a line of inexpensive digital pianos to increase its sales and in fact outsell Allegro is ill-founded. To strengthen this recommendation the author would have to demonstrate that the increased sale in Allegro came out as a result of the sale of digital pianos and provide sufficient data between the two companies to show that the Largo Piano Company is similar to the Allegro Musical Instrument Company.
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