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Argument8 by beetle1986 This Omni Inc. memorandum recommends that they should buy Mesa Foods, a manufacturer of snack food which markets its products within a small region but has strong growth potential. To support this recommendation, the arguer cited the facts that the profits of Mesa last year increased 20 percent and its sales of best-selling product increased in the past three years. However, this argument is unconvincing for several critical flaws. Firstly, merging another company is not just combine the market of each company, it include various aspects. Such as, if the enterprise culture of two companies would conflict? Does Omni enter the food industry before? Would any other businesses of Omni be impacted after incorporation? And so on. Admittedly, Mesa has a 20 percent increase in profits last year, but it does not mean that Mesa would bring same profits after incorporation. Secondly, the evidences cited by the arguer are not convincing. The profits of Mesa increased 20 percent last year, but we are not informed the financial situation of Mesa of the past years. So we cannot conclude that Mesa would continue make profits in the future. It is strongly possible that the increase of last year was not due to the increase of sales but for other financial dealing, and these important information aren’t mentioned in the memorandum. Additionally, the increase of Salsa sales lacks of persuasion. Because that Mesa is a regional company, good sales can only indicate that Salsa fit the taste of local residents very well, but cannot extend to the whole country. So we cannot conclude that Mesa has strong growth potential by the simply description in the memorandum. Last but not least, it is not necessary causal between the age group of 14-to-25 years old who consumes the most snack food and Mesa which is just a regional snack food producer. The memorandum does not provide any information that the produce of Mesa attracts young people a lot. Maybe the main consumers of Mesa are kids and senior citizens, or other groups. Without evidence to prove the main consumer is the group of 14-to-25 years old, buy Mesa would not fit the interest of Omni. To sum, this recommendation ignores the impact of incorporation to each company, and not supplies enough evidences to justify the capacity of make profits of Mesa. To persuade the manager, they should offer enough evidences about Mesa, such as the main consumers, the popularity of its produce, and the detailed ledger of Mesa. |