Studies suggest that an average coffee drinker’s consumption of coffee

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Prompt:

The following appeared as part of the business plan of an investment and financial consulting firm:

“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.”

Essay:

The argument mentions studies suggest that the average coffee drinker’s consumption of coffee increases with age, while the average cola drinker’s consumption of cola decreases with age. The argument states that since the number of the older adults in the population will increase significantly over the next 20 years, the demand for coffee will increase and the demand for cola will decrease, the investment and financial consulting firm should transfer its investments from Cola Loca to Early Bird Coffee. I find this argument unconvincing for several reasons.

First, the argument’s statement that the demand of coffee will increase while that of cola will decrease over the next 20 years is problematic. While it is true that the number of older people in the population are bound to increase over a period this long, the argument fails to take the new generation that will also become a part of the consumer base in this period. For example, if there is a population boom in the next 20 years, the increase in the number of younger people in the population might be much more significant than the increase in the number of older people. In such a case, Cola Loca might prove to be a more profitable product over the next 20 years.

Secondly, the argument does not consider any other product besides Early Bird Coffee while talking about transferring investments. Even if the statement that demand of coffee will increase and that of cola will decrease over the next 20 years is considered to be true, the argument fails to consider the demand of Early Bird Coffee might not increase in itself. The consumers might not like the taste, or they might find the prices too high. In such a case the transfer of investments would not be the right move for the company.

To conclude, I believe the argument will become more convincing if certain issues are addressed. The argument needs to take into account the increase that might occur in the number of younger people. The argument also needs to consider the market performance of Early Bird Coffee before making the decision to invest in the product.

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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.”

My Response:

The author cites two trends that were observed over the past 40 years, one of which points towards increase in coffee consumption of a coffee drinker with age and the other towards a decrease in cola consumption with age. The author goes on to say that the older adult population is going to increase over the next 20 years, so will the demand for coffee and hence, investing in Early Bird Coffee may be a good idea. The author's conclusion is built on insufficient evidence and many assumptions, which may or may not be true. Thus, the author's argument suffers from several flaws , some of which are discussed below.

First, the author readily assumes that the number of older adults is going to increase while number of younger adults who prefer cola to coffee is not going to increase. There is no evidence to support this. The author can only safely assume this only if additional data on population forecast and demographic are known.

Second, the author does the mistake of assuming that the beverage preferences may not change over the next 20 years. The fact that the preferences haven't changed the last 40 years does, in no way, guarantee that the case will remain the same for forever or even for the next 20 years. In fact, the author does not even consider the fact that there might be other beverages that might be increasingly consumed in comparison to coffee and whose consumption is independent of age. The author's argument takes a very narrow binary approach in that it only compares coffee and cola, ignoring other potentially better options. This constitutes a critical flaw in the argument's reasoning.

Third, the author's quick conclusion also reveals another flaw of reasoning: demand of coffee in the next twenty years is the sole criteria for deciding to invest in coffee-related ventures. Obviously, linking investment decision to only one criteria rather than looking at other equally important factors like IRR, payback period, etc.

Finally, the argument is concerned with investing in Early Bird Coffee, presumably a coffee-oriented business and divesting from Cola Loca, presumably a cola-oriented business. Even if the statistics in the argument's premise point in favor of increase in demand of coffee in the next twenty years, how do we know if the statistics apply in favor of Early Bird Coffee and against Cola Loca. The assumption that the population the statistics are based on and the population that Early Bird Coffee is intending to serve is the same is by far the most dangerous assumption in the argument. Is Early Bird Coffee located in the same country where the trends related to coffee-drinking were observed? Is Cola Loca not going to expand and include coffee in its product line or introduce coffee-flavored cola that has potential to become a big hit? Answering these questions might add substance to the author's argument.

However, the author's conclusion of considering to transfer investments to Early Bird Coffee, presumably a coffee-oriented business, does have merit because it is clear that he/she hasn't decided to invest; he/she is merely suggesting to consider rather than proposing to invest right away. In order to strengthen the argument, the author would do well to fill the information gaps discussed above which will confirm or eliminate the assumptions he/she made, bringing him/her one step closer to better informed investment proposal.

In summary, the author's conclusion is based on insufficient statistics and questionable assumptions. Only by resolving the flaws discussed above, can the author's conclusion be valid, at best, and the plan of transferring investment open to further discussion.

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Answer:

The argument, which appeared as a part of the business plan of an investment and financial consulting firm, claims that since the number of older adults would increase in the next 20 years, the firm should transfer its investments from Cola Loca to Early Bird Coffee.This is based on a report that suggests that the number of coffee drinkers increases with age while the number of cola drinkers decreases with age. Stated in this way the argument is inconclusive without data supporting its hypothesis. It tends to manipulate facts to present a distorted view of reality and is a leap of faith reasoning without clear outcomes. Thus the argument could be improved if it provided supporting data on which its core assumptions depend upon.


First the argument assumes that since the trends reported have remained stable for the past 40 years they will continue to remain so. This statement is incorrect because we cannot depend on past results to get a concrete idea about the future. For example the number of people preferring diesel vehicles in the past in India were lesser than those preferring petrol vehicles however over the years this gap in the preference of people's choices has narrowed down. Similarly it is possible that people few years back may have liked coffee more as they grew older but the newer generations continue to like cola despite age. Therefore the argument would have been much clearer if it explicitly stated the period of survey, number of people researched in the survey and also the population increase in the areas where the survey had been conducted, while making its claim.


Secondly the argument claims that the number of older adults would significantly increase as the population ages over the next 20 years and so the firm should transfer its investments. This is again weak and unsupported since the argument does not consider the fact that as population increases over the next 20 years, the increase in population of children can be more than the older adults.So unless the argument provides a clear picture of the fact that over the next 20 years the number of children would not increase to more than that of the older adults, it would be unwise to deem that number of coffee drinkers would be more than the cola drinkers. Hence the argument should provide some evidence to make its claim more convincing.


Finally the argument should answer such questions as:What is the percentage of each age group in the survey conducted? What is the expected percentage increase in the population of each age group over the next 20 years? What percentage of people who currently like coffee have slowly started drifting to cola? Without convincingly answering these questions, one is left with the impression that the claim is more of a wishful thinking than a substantiative evidence.


In conclusion the argument is flawed for the above reasoning and therefore it is unconvincing. It could be considerably strengthened if it provided some justification regarding its assumption that only the number of older adults would increase over the next 20 years. In order to assess the merit of a decision it is necessary to have the full knowledge of its contributing factors. In this particular case the implications of age and mortality rate of area in which survey was conducted along with the percentage distribution of each age group surveyed.Without this information the argument is unsubstantiated and open to debate.

Please evaluate my response.

The business plant argues that the firm should consider transferirng its investment from Cola Loca to Early Bird Coffee because a decrease in demand of cola is expected in the next 20 years, based on certain studies showing result of consumption pattern of cola and coffee. This argument suffers from various logical fallacies as it is based on unsupported assumptions, as discussed below, and hence is weak and unconvincing, in its current state.

Firstly, the author states that certain studies showed a trend that coffee consumption increases with age, whereas cola consumption decreases with age, from ages 10 through 60. This premise is a weak support for this argument's conclusion as it does not provide any information about the demographics of the population and sample of coffee and cola drinkers included in the survey. It is quite possible that maximum people who participated in the survey were avid coffee drinkers and of older age, representing a tiny proportion of the population, which means that in reality, there is no such trend that shows that coffee consumption increases with age and cola consumption decreases and that the result of the study does not paint the true picture of the actual trend prevailing in the market. If the author provides additional information on the demographics of the population and sample of the survey, then argument would be more convincing.

Next, the author claims that the trend observed in the study has remained stable for the past 40 years and since the number of older adults will significantly increase as the population ages over the next 20 years, demand for coffee will increase and that for cola will decrease. Rather than strengthening the argument, this claim makes one question the validity of the argument. This claim just simply assumes that a trend observed in the past will continue in the future as well. What if factors other than age of the drinkers, affect the consumption trend due to which consumption of coffee reduces and that of cola increases? Moreover, this claim also assumes that the number of older adults will increase in the next 20 year, but it does not consider the fact the existing adults would have children who would grow to become the younger generation consuming cola in future. Unless the author provides additional compelling evidence that addresses these questions, the argument remains weak.

Finally, the author concludes that the firm should consider transfer its investments from Cola Loca to Early Bird Coffee. This conclusing is a stretch because it is based only on the consumption trends based on age of the drinker. There are various other factors that affect the profitability of the investment. To illustrate, Cola Loca could be profitable through exports, where the profits could be way more than those from Early Bird Coffee. There is also a possibility of sale of cola business to a giant corporation in future. The author must conduct further studies on the internation market expectations and trends to arrive at a valid conclusion.

To summarize, the arguments made in the business plan are based on unsupported assumptions and incomplete information, due to which the viability of the plan is questionable. The author must add further information to address the issues discussed above. Unless these flaws are resolved, the argument remains weak and open to debate.

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Would you be able to evaluate my answer? Thank you.

Prompt:

The following appeared as part of the business plan of an investment and financial consulting firm:

“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.”

Answer:

The argument claims that investments should be transferred from Cola Loca to Early Bird Coffee as current studies suggest that over the next 20 years, as the number of older adults increases, we will see an increase in the demand of coffee and a decrease in the demand of cola. The argument fails to mention several key factors, on the basis on which it could be evaluated and creates a narrative that relies on assumptions without clear evidence. Hence, the argument is unconvincing and has several flaws.

Firstly, the argument readily assumes that an increase in the demand of coffee and a decrease in the demand of Cola would automatically make one beverage more profitable to invest in compared to the other. This is a weak and unsupported claim as the argument does not demonstrate a correlation between the demand for the product and the profitability and viability of an investment. For example, profit margins and cash flow received from an investment in Cola Loca might still be higher compared to the profit margin and cash flow from Early Bird Coffee even though the demand curves are suggesting otherwise. Clearly, those two are not the only factors that should be taken into consideration, but it is without doubt that an investment depends on more than just the demand projections over the next 20 years. The argument could have been much clearer if it explicitly shown, through more than one factor, how one is a better investment than the other.

Secondly, the argument claims that the decrease in cola demand will be significant enough to make a related business to be a bad investment. However, the magnitude of the decline is not mentioned. This is a very important factor that needs to be taken into consideration. To illustrate, if the average cola consumption at age 20 is 5 cups a day, and it decreases to 4 cups a day past the age of 60, this would not be significant enough to make the investment a bad one. At the same time, the increase in coffee consumption is not mentioned either. For instance, we could see an increase of from one cup a day at age 20 to 2 cups a day at age 60 in coffee consumption, which would not be as significant as the argument implies. In fact, it is not at all clear, if the demand decrease in cola consumption and the demand increase in coffee consumption are significant enough to warrant a transfer of investments.

Finally, there are numerous other questions that could create doubt around the reasoning of the argument. For example, how is it implied that the next generation will have the same behaviours as this generation. We have seen numerous changes in trends over time and this could be the case here. Furthermore, what are Cola Loca and Early Bird Coffee? Depending on what kind of business they represent (coffee shop, drink manufacturing, soda store, etc.), we can have different answers to this investment decision. Without convincing answers to those questions, one cannot infer whether the conclusion is sound or not.

In conclusion, the argument is flawed for the above-mentioned reasons and is therefore unconvincing. Without more information, the argument remains unsubstantiated and open to debate.

Good Luck

Would you be able to evaluate my answer? Thank you.

Prompt:

The following appeared as part of the business plan of an investment and financial consulting firm:

“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.”

Answer:

The consulting firm's business plan recommends transferring the firm's investments from a cola to a coffee company. This cource of action is supported because, according to a survey, coffee consumption by an average coffee drinker increases with age, whereas cola consumption by a cola average drinker declines, and since the population will grow older within the next 20 years, the consumption of coffee will presumably increase as opposed to that of cola.

Even though the business plan may have some merit, it is based on insufficiently backed up evidence, and ends up in its conclusion by making certain assumptions regarding the coffee and cola drinking trends and population.

First of all, the consulting firm cites a survey to show that the average coffee drinker's consumption of coffee increases with age, without providing any information regarding the circumstances of the survey. As with all surveys, the sample should be large enough and representative of the population it attempts to describe. Furthermore, the cola consumption trends and the aging of the population are not supported by any data whatsoever. The consulting firm should provide reliable statistics or expert opinions in order to support its evidence and make the conclusion more reliable. Such evidence could be a large sample size for the survey, and well documented reasearch for the cola consumption and the aging of the population.

In addition, even if the facts mentioned held true, the coffee and cola trends refer to the past 40 years. There is no assertion that these trends will remain stable within the next years. As generations change, so do their eating habits. Relying on past data to draw a conclusion about the future is an often used method by many corporations. However, this method does not necessitate success. The business plan should provide further information about the evolution of consumption trends and how they are projected to evolve within the next decades.

Lastly, on the basis of the aforementioned evidence, the consulting firm suggests transferring investments from Cola Loca company to Early Bird Coffee company. Even if the demand for coffee increases and the demand for cola decreases, demand is not the only means to determine the prospects of the investment. Competition, market share and company specific financials are all crucial factors. Cola Loca company, for instance, could hold a significant market share of the cola beverages industry, whereas Early Bird Coffee could hold only a small market share, making the former a more favorable investment. More information is necessary about the two companies to decide about investing in one of them.

All in all, the business plan fails to provide the necessary information in order to substansiate its courses of action. The consulting firm should provide further data regarding the consumption trends , the aging population and the companies between which it wants to allocate its investments, in order to make a sound and prosperous decision.

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The argument concludes that the investment and financial consulting firm should consider transferring their investment from Cola Loca to Early Bird Coffee. To support this conclusion, the argument claims that while coffee consumption increases with age, cola consumption declines with increasing age. Stated in this way, the argument manipulates facts and conveys a distorted view of the situation. The conclusion of the argument relies on assumptions for which there is no clear evidence. Hence, the argument is unconvincing and has several flaws.

First, the argument readily assumes that increased coffee consumption with age by an average coffee drinker directly implies higher quantities of coffee consumed by the overall coffee drinking population as they age. This statement is a stretch and not substantiated in any way. For instance, while the amount of coffee consumed by a coffee drinker at an older age might be higher than that at a younger age, it is unclear whether the number of coffee drinkers remain same of non-decreasing with increasing age. Further, the argument uses vague terminology as the word 'increase' could mean either a mild increase or significant increase of the average coffee drinker's coffee consumption. On similar lines of reasoning, it could be argued that decline in average cola drinker's cola consumption need not necessarily mean decline in overall cola consumption of the cola drinking population with age. The argument could have been much clearer if it stated that the overall coffee consumption of the coffee drinking population would increase with age and the overall cola consumption of cola drinking population would decrease with increasing age.

Second, the argument claims that demand for coffee and demand for cola would increase and decrease respectively over the next 20 years and that the firm should consider transferring their investments from Cola Loca to Early Bird Coffee. This is again a very weak and unsupported claim as the argument does not demonstrate any correlation between average consumer's consumption and overall consumption. Further, while the average cola drinker's cola consumption might decline with age, the cola drinker might switch to sugar free substitutes of cola, which might usually be sold the same cola company. If it is true that cola drinkers switch to sugar free substitutes of the same company, the author's argument is undermined. If the argument had provided evidence that cola drinkers do not switch to alternative drinks of the cola company's products, then argument would have been a lot more convincing.

Finally, has the author considered actual consumption of coffee and cola of the population with increasing age? Also, has the author considered the performance of the Early Bird Coffee relative to its competitors? Without convincing answers to these questions, one is left with an impression that the claim is more wishful thinking than substantive evidence.

In conclusion, the argument is weak and unconvincing because of the above-mentioned flaws. It could be considerably strengthened if the author had mentioned all the relevant facts, such as overall consumption of coffee and cola, performance of competitors to Early Bird Coffee, and alternatives to cola consumed by cola drinkers. In order to assess the merits of the claim that the firm should transfer its investment from Cola Loca to Early Bird Coffee, it is essential to have full knowledge of all contributing factors. Without this information, the argument remains unsubstantiated and open to debate.

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Sajjad1994 Can you please kindly evaluate mine too? Thanks a lot !

In this argument, the author reaches the conclusion that the company should consider transferring their investments from Cola Loca to Early Bird Coffee. The basis of this recommendation is that a decrease in cola demand is expected in 20 years, based on certain studies suggesting that an average coffee drinker's consumption of coffee increases with age, while the average cola drinker's consumption of cola declines with age. At first glance, the argument appears to be somewhat convincing, but further scrutiny reveals that the argument omits some important concerns that should be addressed to substantiate the argument.

Most conspicuously, the argument blindly refers to certain studies without indicating who conducted the studies, what is the sample size of the studies, how the studies are conducted, or when the studies are conducted. What if the studied samples the argument refers to are nowhere close to the actual group of coffee and cola consumers? What if the studies were conducted 50 years ago and thus are too old to be used as references for today? Until these questions are answered, the studies are worthless to be cited by the argument.

Moreover, what happened in the past does not necessarily mean that it will happen again in the future. Although the trends that the coffee consumption remains high and the cola consumption declines with increasing age have remained stable for the past 40 years, they might not still be the case for the future. Generally, there are many factors that affect the consumption of coffee or cola for different ages. It could very well be that these factors are no longer the same in the future and therefore result in totally different trends. Hence, the argument would have been more convincing if it had illustrated why the trends from the past are applicable to the present and future situations.

Finally, the argument falsely depends on the gratuitous assumption that transferring the investments from Cola Loca to Early Bird Coffee will bring larger gain. While the market demand of a product is an important element in determining its overall profitability, it is hardly the only element. In fact, there are many other elements that also contributing to the profitability, such as production cost, the number of competitors, market share, etc. If Cola Loca currently holds a dominant position in the cola's market share while Early Bird Coffee currently only accounts for a very small piece in the coffee's market share, then transferring the investments from Cola Loca to Early Bird Coffee might actually result in a net loss. In short, without ruling out these possibilities, the assumption is unwarranted.

To sum up, the argument's conclusion that the company should transfer the investments from Cola Loca to Early Bird Coffee is seriously undermined by the numerous flaws in the reasoning identified above. If the reasoning had been taken into account, the argument would have been much more thorough and convincing.

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Can you review mine? Thank you

The business plan suggests that the firm considering transferring investments from Cola Loca to Early Bird Coffee based on the findings on consumption trends. The firm's conclusions is based solely on this piece of information and fails to consider other sources and logic. Before a transfer of investments should be made, there needs to be more consideration of other population changes, consumer trends and alternate investments.
The plan factors in the prediction that older demographic will increase over the next 20 years. However, it fails to factor the possibility of other demographic growth. If for instance, we see a large growth in under 18 demographic, then there a case to increase investments in Cola Loca.
Additionally given the recent discoveries in health and medicine we might see a change in consumer behavior. Given the access to stronger medicine, there may be groups who might not be as concerned about their health or vice versa and change their consumption behaviors accordingly.
Lastly it would be beneficial to consider other investments beyond Early bird coffee and Cola Loca. Perhaps consumers wants healthier versions of soda or coffee. Perhaps they have an aversion to caffiene and are looking for caffiene-free options. The age trend is simply not enough to make such a decision.
Given there exists multiple alternatives and factors that play into consumption, it would be best for the firm to explore additional studies before making a decisions. Additionally, it would be in their best interest to widen their scope if feasible to explore how they can best add or optimize their portfolio.