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Read the following scenario and answer the THREE questions that follow.
Comprehension:
Sundaram Stores operated in a gated community, situated about 30 Kilometers away from the main town. The store owner Mr. Sundareswaran Pichaimuthu, or Sundaram as he was called by everyone, secured a space in the gated society through a competitive bidding process. The residents’ association, led by Mr. Thangamoorthy Selvaganapathy, selected Sundaram over three other bidders, based on his willingness to pay the highest rent. Desperate to augment his post-retirement income, Sundaram agreed to pay a very high rent, banking on the prospect of generating exceptional revenue from the gated community.
Sundaram was awarded the contract to establish the store, with provisions for a review every three years. Feeling elated during the meeting with the residents’ association to finalize the contract, he enthusiastically committed to offering a 15% discount on all groceries and stationary, cementing goodwill and reinforcing the partnership established through the contract. The association was delightedly taken aback by his generous assurance. Sundaram hoped to make up the difference through volume.
Although his sales were strong during the initial months, he soon realized that the SUV-owning residents of the gated community primarily made their purchases at large, branded retail chains in the main town. These stores offered deeper discounts, which he could not afford to compete with. However, gradually, Sundaram store became their go-to store for daily essentials and occasional urgent big purchases such as replacing a broken mixer-grinder.
To increase his profits, Sundaram diversified into selling vegetables. Earlier, a vegetable vendor used to visit the gated community once every week. The vendor, after seeing dismal sales ever since Sundaram started selling vegetables, stopped visiting the gated community. The residents’ association did not like losing the rent they were receiving from the vendor. Additionally, the maintenance staff of the gated community benefitted from receiving vegetables either for free or at extremely low prices, as the vendor, reluctant to take back the unsold stock, chose to distribute them at little to no cost. This enabled the residents’ association to retain maintenance staff whose attrition rate was increasing with more gated communities coming up in the nearby area.
Which of the following options will BEST address the concerns of the residents’ association arising out of Sundaram getting into selling vegetables?
The correct answer is Option D, as it effectively addresses the residents' association’s concerns while maintaining balance among all stakeholders. Offering the vegetable vendor a discounted rent would incentivize him to return to the gated community, restoring competition and potentially lowering prices for residents. Moreover, the vendor’s return would reinstate the practice of distributing unsold vegetables to the maintenance staff, helping to retain them amidst rising attrition. This solution ensures the association continues to receive rent, resolves concerns over staff retention and avoids placing additional burdens on Sundaram.
Option A, inviting bids for another grocery store, could lead to market saturation, harming Sundaram’s business and failing to restore the maintenance staff's benefits.
Option B, asking Sundaram to rent the vendor’s former space, would increase his costs without resolving the association’s concerns regarding the staff and the vendor.
Option C, imposing a fine on Sundaram, is punitive and does not address the actual issue of the staff losing access to discounted or free vegetables.
Option E, asking Sundaram to provide free vegetables to the staff, would impose an unfair financial burden on him, making this solution unsustainable.
Hence, Option D is the best choice as it directly resolves the association’s concerns by bringing back the vendor, restoring competition, ensuring staff retention, and maintaining harmony in the community without negatively impacting Sundaram.
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