Can some one please give a feedback on this GMAT Essay ?
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13 Sep 2014, 04:21
Hi !
I attempted the following question as a part of my GMATPREP test. Can anyone please give an honest feedback on this one ?
Thanks an advance.
PROMPT:
“Studies suggest that an average coffee drinker’s consumption of coffee increases with age, from age 10 through age
60. Even after age 60, coffee consumption remains high. The average cola drinker’s consumption of cola, however,
declines with increasing age. Both of these trends have remained stable for the past 40 years. Given that the number
of older adults will significantly increase as the population ages over the next 20 years, it follows that the demand for
coffee will increase and the demand for cola will decrease during this period. We should, therefore, consider
transferring our investments from Cola Loca to Early Bird Coffee.”
RESPONSE :
The above argument per the consulting firm states that the investments should be transferred from Coca Loca to Early Bird Coffee because the demand of coffee will increase and demand of cola will decrease. This has been concluded from the studies of average drinkers consumption patterns for people of aged 10 years to 60 years. The author first states that with respect to age, consumption of cola decreases and consumption of coffee increases. Then due to the fact that the population of the older adults is going to increase for the next 20 years, the respective demand change will occur and hence the conclusion. Though the conclusion might be all right as per the situation but it lacks in being enough convincing because of extrapolated assumptions and evidence.The analysis below takes a deeper dive into the line of has a reasoning of the argument and suggests how constructively the argument could have been more convincing.
Firstly, the author states that the certain studies suggest that the average coffee drinker's coffee consumption increases from age 10 to age 60. Here, if this statement is probed further, we do not know which sample space the studies are talking about. The author has not mentioned if the study has been done on population which is representative of consumption habits the entire market segment for the two firms. Hence, the argument is open to attack, for example in case the sample space changes from one country to any other country, or any other sample space, the conclusions might change.
Secondly, the author mentions that the trend which has been constant for the past 40 years will be followed for the next 40 years too. That again is an assumption which can be refuted if any information on change in public awareness and people's habits is obtained. Similarly, the author has not considered if the climatic conditions change and people might want to prefer aerated drinks instead of coffee. Or any other reason for that matter which might change the consumption of coffee. It would have been a stronger case if the author would have presented the reasons why this trend has been predicted. Also it would have been more believable that if the author would have presented a few factors which govern this trend and he would have mentioned that these factors, for example , are supposed to increase, causing an increase in demand , just as it has happened in the last 40 years.
Thirdly, though the fact that author has mentioned that the population of older adults will significantly increase is true, the author has overlooked the fact that the population of the younger adults might simultaneously increase and increase the cola consumption at similar rates. The argument is open to attack with any population data which proves that the increase in younger adult population is more than the increase in adult population. It would have been more beneficial for the argument if the author would have presented any information on how is it sure that that the population of elders would be higher.
Finally, the author has not very clearly mentioned about the reasons for investment strategy. Though it is logical that higher demand will increase revenue, we still can not be sure of the fact that will the revenue and growth in coffee company would be higher than that in the Cola company. The author has assumed that the investment is done on the basis of demand of any product whereas the profitability of investment, revenue earned or any other factor for that matter do not figure in the picture. For example, it is possible that though the demand of Cola increases a lot, the business still remains more profitable and less risky. Similarly there can be other factors which have not figured in the argument. The argument is open to discussion in that terms.
In summary, I would like to mention that though the argument has a logical flow of facts, it still is open to discussion at a few places where posing certain evidence would have helped the author in order to make the conclusion more convincing. The argument needs a few more assumptions clarified where the author presented information on justifying the trend or justifying the increase in demand or justifying the investment strategy.