The following appeared as part of a business plan created by the management of the Take Heart Fitness Center. After opening the new swimming pool early last summer, Take Heart saw a 12 percent increase in the use of the center by members. Therefore, in order to increase the number of our members and thus our revenues, which depend on membership fees, we should continue to add new recreational facilities in subsequent years: for example, a multipurpose game room, a tennis court, and a miniature golf course. Being the only center in the area offering this range of activities would give us a competitive advantage in the health and recreation market. Discuss how well reasoned . . . etc. Because Take Heart Fitness Center experienced a 12 percent increase in member usage as a result of opening a new swimming pool last summer, the author recommends the addition of new recreational facilities in subsequent years as a means of increasing membership in Take Heart. The authors recommendation is problematic for several reasons. First, and foremost, the author assumes that an increase in member usage portends an increase in membership. This assumption may hold true in some cases. However, it is unlikely to hold true in the case at hand, because it is reasonable to expect that members would visit the fitness center to inspect and try out the new swimming pool. This would account for the increase in usage. However, since the author provides no evidence that this new rate of usage was sustained, the abrupt increase in usage provides little evidence that the addition of facilities such as the pool will attract new members. |