Find all School-related info fast with the new School-Specific MBA Forum

It is currently 21 Oct 2014, 06:24

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Company X experienced a significant loss of market share ove

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
3 KUDOS received
Current Student
User avatar
Joined: 14 Dec 2012
Posts: 838
Location: India
Concentration: General Management, Operations
GMAT 1: 700 Q50 V34
GPA: 3.6
Followers: 37

Kudos [?]: 611 [3] , given: 197

GMAT ToolKit User
Company X experienced a significant loss of market share ove [#permalink] New post 09 Jul 2013, 14:56
3
This post received
KUDOS
3
This post was
BOOKMARKED
00:00
A
B
C
D
E

Difficulty:

  35% (medium)

Question Stats:

64% (02:04) correct 36% (01:05) wrong based on 296 sessions
Company X experienced a significant loss of market share over a number of years. To strengthen its market position, the company decided two years ago to increase the percentage of total revenue devoted to research and development. The following year, the company's market share increased by 10 percent. In response, company management further increased the amount of money devoted to research and development.

Which of the following investigations is most likely to yield significant information that would help evaluate whether the company's decision to further increase the research and development budget was warranted?


A)Determining how many new products the company has created over the past year

B)Determining the percentage of revenue that other companies devote to research and development

C)Determining whether any of the company's competitors have withdrawn from the market in the past two years

D)Determining the maximum percentage of revenue that the company can devote to research and development without affecting the company's production budget

E)Determining whether all of the company's new products have fared equally well in the marketplace
[Reveal] Spoiler: OA

_________________

When you want to succeed as bad as you want to breathe ...then you will be successfull....

GIVE VALUE TO OFFICIAL QUESTIONS...



GMAT RCs VOCABULARY LIST: vocabulary-list-for-gmat-reading-comprehension-155228.html
learn AWA writing techniques while watching video : http://www.gmatprepnow.com/module/gmat- ... assessment
: http://www.youtube.com/watch?v=APt9ITygGss


Last edited by blueseas on 09 Jul 2013, 20:58, edited 1 time in total.
Kaplan Promo CodeKnewton GMAT Discount CodesManhattan GMAT Discount Codes
2 KUDOS received
Manager
Manager
avatar
Joined: 11 Aug 2012
Posts: 137
Schools: HBS '16, Stanford '16
Followers: 0

Kudos [?]: 30 [2] , given: 16

Re: Company X experienced a significant loss of market share ove [#permalink] New post 09 Jul 2013, 20:52
2
This post received
KUDOS
C

If the market share increased because a competitor dissapeared, then the increase in the market share was not caused by the increase in the research and development budget.

So, it's possible that increasing the budget again won't increase the market share.
4 KUDOS received
Verbal Forum Moderator
Verbal Forum Moderator
User avatar
Joined: 15 Jun 2012
Posts: 1118
Location: United States
Followers: 136

Kudos [?]: 1373 [4] , given: 122

Re: Company X experienced a significant loss of market share ove [#permalink] New post 09 Jul 2013, 22:38
4
This post received
KUDOS
Very good question Shailes. :)

ANALYZE THE STIMULUS:

Fact: Company X experienced a significant loss of market share over a number of years
Fact: two years ago to increase the percentage of total revenue devoted to RnD.
Fact: The following year, the company's market share increased by 10 percent.
Conclusion: company management further increased the amount of money devoted to RnD.

Pre-thinking: Company X considered RnD expenses made market share increase 10% ==> Question: whether RnD expense was the only factor that made company X market share increase? Any other factor contributed to the increase such as competitors, new regulations, customers’ favors, etc?

ANALYZE EACH ANSWER:

A)Determining how many new products the company has created over the past year
Wrong. The number of new products does not guarantee the increase of market share ==> It may or may not affect the market share, we are not sure ==> Hence, A is wrong.

B)Determining the percentage of revenue that other companies devote to research and development
Wrong. The percentage of revenue devoted to RnD is just a “hard” fact. You cannot assume more percentage, more increase of market. We need a reason why the percentage links to the market share ==> B does not help.

C)Determining whether any of the company's competitors have withdrawn from the market in the past two years
Correct. The number of competitors has a direct link to the company X’s market share. If more competitors, company X’s market share may decrease. If fewer competitors, company X’s market share may increase without the help of RnD.

D)Determining the maximum percentage of revenue that the company can devote to research and development without affecting the company's production budget
Wrong. Same as B. You cannot assume: the more percentage, the more increase of market. Thus, determining the maximum percentage of revenue devoted for RnD does not help.

E)Determining whether all of the company's new products have fared equally well in the marketplace
Wrong. The same logic as A’s. The fact that “company’s new products have fared equally well” may or may not affect the market share increase, we are not sure ==> Hence, E is wrong

Hope it helps a bit.
_________________

Please +1 KUDO if my post helps. Thank you.

"Designing cars consumes you; it has a hold on your spirit which is incredibly powerful. It's not something you can do part time, you have do it with all your heart and soul or you're going to get it wrong."

Chris Bangle - Former BMV Chief of Design.

Current Student
User avatar
Joined: 14 Dec 2012
Posts: 838
Location: India
Concentration: General Management, Operations
GMAT 1: 700 Q50 V34
GPA: 3.6
Followers: 37

Kudos [?]: 611 [0], given: 197

GMAT ToolKit User
Re: Company X experienced a significant loss of market share ove [#permalink] New post 09 Jul 2013, 22:41
hi pghai,

kudos are the best way to appreciate good efforts... :wink:

well anyways thanks :-D
_________________

When you want to succeed as bad as you want to breathe ...then you will be successfull....

GIVE VALUE TO OFFICIAL QUESTIONS...



GMAT RCs VOCABULARY LIST: vocabulary-list-for-gmat-reading-comprehension-155228.html
learn AWA writing techniques while watching video : http://www.gmatprepnow.com/module/gmat- ... assessment
: http://www.youtube.com/watch?v=APt9ITygGss

Verbal Forum Moderator
Verbal Forum Moderator
User avatar
Joined: 15 Jun 2012
Posts: 1118
Location: United States
Followers: 136

Kudos [?]: 1373 [0], given: 122

Re: Company X experienced a significant loss of market share ove [#permalink] New post 09 Jul 2013, 22:49
shaileshmishra wrote:
Quote:
hi pghai,

kudos are the best way to appreciate good efforts... :wink:

well anyways thanks :-D


Sorry about that Shailes. +1kudo for you :)
Please keep posting new questions. I really appreciate your posts.
_________________

Please +1 KUDO if my post helps. Thank you.

"Designing cars consumes you; it has a hold on your spirit which is incredibly powerful. It's not something you can do part time, you have do it with all your heart and soul or you're going to get it wrong."

Chris Bangle - Former BMV Chief of Design.

Current Student
User avatar
Joined: 14 Dec 2012
Posts: 838
Location: India
Concentration: General Management, Operations
GMAT 1: 700 Q50 V34
GPA: 3.6
Followers: 37

Kudos [?]: 611 [0], given: 197

GMAT ToolKit User
Re: Company X experienced a significant loss of market share ove [#permalink] New post 09 Jul 2013, 22:50
pqhai wrote:
shaileshmishra wrote:
Quote:
hi pghai,

kudos are the best way to appreciate good efforts... :wink:

well anyways thanks :-D


Sorry about that Shailes. +1kudo for you :)
Please keep posting new questions. I really appreciate your posts.


yup sure pghai ...i willl
thanks again :)
_________________

When you want to succeed as bad as you want to breathe ...then you will be successfull....

GIVE VALUE TO OFFICIAL QUESTIONS...



GMAT RCs VOCABULARY LIST: vocabulary-list-for-gmat-reading-comprehension-155228.html
learn AWA writing techniques while watching video : http://www.gmatprepnow.com/module/gmat- ... assessment
: http://www.youtube.com/watch?v=APt9ITygGss

BSchool Forum Moderator
User avatar
Joined: 24 Aug 2011
Posts: 700
Location: India
Concentration: Technology, Strategy
GMAT 1: 700 Q50 V34
GMAT 2: 710 Q50 V35
GMAT 3: 760 Q50 V42
GPA: 3.2
WE: Information Technology (Computer Software)
Followers: 109

Kudos [?]: 483 [0], given: 384

GMAT ToolKit User Premium Member CAT Tests
Re: Company X experienced a significant loss of market share ove [#permalink] New post 10 Jul 2013, 02:13
D)Determining the maximum percentage of revenue that the company can devote to research and development without affecting the company's production budget

Can someone please explain, why is this wrong?
What if the increase in the RnD intrudes in the production budget and hence decreasing the productions..
_________________

ISB Class of 2016 | Chat Session with ISB ADCOM | How to get started with Essays | GMAT Retake Debrief - 760 | ISB Preparation Kit | My ISB Interview-Aspired Class of 2016
____________________________________________________________________________________________________________________________________________________
ISB Class of 2015 | My GMAT Debrief | My ISB Interview-Aspired Class of 2014 | General interview tips

GMAT Pill Representative
User avatar
Joined: 07 Nov 2012
Posts: 346
Schools: LBS '14 (A)
GMAT 1: 770 Q48 V48
Followers: 140

Kudos [?]: 186 [0], given: 4

Re: Company X experienced a significant loss of market share ove [#permalink] New post 10 Jul 2013, 02:27
Hi -

Firstly. The golden rule of GMAT: It's not about the perfect answer, it's about the best answer. C is clearly the best answer here, so whilst we can debate D, it's not the best answer by anyone's assumption.

The issue with D is that you can't assume: the more percentage, the more increase of market. Thus, determining the maximum percentage of revenue devoted for RnD does not help.
_________________

Former GMAT Pill student, now on staff. Used GMATPILL OG 12 and nothing else: 770 (48,48) & 6.0



... and more

SVP
SVP
User avatar
Joined: 01 Oct 2013
Posts: 2290
Followers: 276

Kudos [?]: 66 [0], given: 0

Premium Member
Re: Company X experienced a significant loss of market share ove [#permalink] New post 26 Jul 2014, 06:05
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Re: Company X experienced a significant loss of market share ove   [#permalink] 26 Jul 2014, 06:05
    Similar topics Author Replies Last post
Similar
Topics:
The nation in the world has experienced as significant a angel2009 12 03 Apr 2010, 11:38
1 No nation in the world has experienced as significant a spriya 18 14 Oct 2008, 09:05
No nation in the world has experienced as significant a ssandeepan 8 26 Jul 2008, 21:53
Experts publish their posts in the topic An investor bought N shares of company X at $15 per share bmwhype2 2 17 Dec 2007, 13:40
No nation in the world has experienced as significant a selene 15 09 Mar 2006, 10:04
Display posts from previous: Sort by

Company X experienced a significant loss of market share ove

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.