Please score/evaluate my essay, "Olympic Foods..."
[#permalink]
09 Sep 2014, 17:04
Prompt:
Over time, the costs of processing go down because as organizations learn how to do things better, they become more efficient. In color film processing, for example, the cost of a 3-by-5 inch print fell from 50 cents for five-day service in 1970 to 20 cents for one-day service in 1984. the same principle applies to the processing of food. And since Olympic Foods will soon celebrate its 25th birthday, we can expect that our long experience will enable us to minimize costs and thus maximize profits.
My response:
The annual report put forth by Olympic Foods is not well-reasoned. It relies heavily on two major assumptions and uses an example from an unrelated industry to make its case. If made available, a few key pieces of information would help refine the argument and thus provide a better case to ensure the confidence of Olympic Foods’ stockholders.
The annual report concludes that Olympic Foods can expect to maximize profits based on the evidence that, with time, organizations become more efficient and, vaguely, “learn how to do things better.” The report cites an example from the photography industry where the cost and time to produce a print fell substantially in a fourteen-year period. Although this idea is intuitive and is seen in many industries, it relies heavily on the assumption that Olympic Foods has actually made the effort to become more efficient and adopt new technologies or practices. Furthermore, the example of the photographic print fails to mention whether a reduction in selling price was seen along with the reduction in cost. This does not give the full picture of the profit for that item and it is unclear if profits actually increased. Furthermore, the availability of such technology across the entire industry would likely have lead to price competition among the film processing companies.
A stronger argument for Olympic Foods would state the actual improvements to efficiency Olympic Foods has made to drive down costs, along with the plan for the selling price of their products and the projected earnings based on market data. This would better demonstrate Olympic Foods’ ability to maximize profits.
By addressing a few missing pieces of information, the annual report could create a more cogent argument that would better please the stockholders of Olympic Foods about the future of the company.
***
Thank you for your help!