Question

Arlene opens a donut shop that offers plain, glazed, and chocolate donuts, along with fresh coffee. How could Arlene expand her business with the least risk to her current profits?

Hire someone to tell her how to run her shop more efficiently.
Open several new stores in different cities across the country.
Expand her current menu to include other products and flavors.
Make television and radio commercials for a national advertising campaign.

Answer 1

Any idea?

Answer 2

nope..none

Answer 3

Well if she hires someone, she's going to have to pay them and if that doesn't work out it would be a loss to her current profits

Answer 4

Opening several stores would cost a lot and it would hurt her profit if they run out of business

Answer 5

Advertisements take up a lot of money especially for a national campaign, so to me, C) would seem to hurt less because if other products don't work out, she could switch them to others or take them out, and they don't cost as much as the rest of the options

Answer 6

I would agree with @Mekek

More skews (items) can cost a company money, but this is typically when they are on a large scale (franchises or many stores). This is just one coffee shop that would need to be supplied with any new products and flavors, so it's more simple and cheap.

Wages are also one of the most costly factors for companies, so an employee could suck more money out than what you're getting. More stores is extremely costly, and a risky investment. One of McDonald's initial difficulty when they began was store locations and real estate. And a national advertising campaign would obviously be quite expensive as well.