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Analytical Assessment: Please review my essay

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Joined: 03 Aug 2017
Posts: 21
Location: United States (NY)
GMAT 1: 720 Q49 V39
GPA: 3.76
Analytical Assessment: Please review my essay  [#permalink]

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New post 07 Oct 2017, 05:30

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


The argument states that as people get older they also drink larger amounts of coffee but drink less amount of Cola. Because the population is getting older the investors should consider switching their investments from Cola Loca to Early Bird Coffee. Unfortunately, this argument does not take into consideration three alternative viewpoints which could offer additional insight into the investment decision. The possibility that a large population of coffee drinkers may be entering the later stages life, the total market share of each company, and the overall profitability of each product, should be considered.

First, the argument does not take into consideration that the there may be more coffee drinkers today, but as the population shifts from one generation to another, the overall age of the country can decrease. Although morbid, the reality is that Baby boomers are starting to enter the age equal to America’s average life expectancy (assuming this is in America). Over the coming two decades there is a possibility that birth rates will increase, and in 10 years more children will be present than ever. Likewise there may be less adults aged 60 + then ever. If the decision to switch investments is being made now, it is likely the cola company is not doing terribly worse than the coffee company. The prospects of improved performance for the Cola company does remain high, if the average demographic starts getting younger.

Second, and the more important factor of the three, is the fact that the choice to switch investments from Cola loca to Early Bird Coffee may not depend of the demographic of drinkers, but rather the market competition, and product margin. While not defined in the argument, there may be 100s, or even 1000s of Coffee competitors all fighting for a small piece of the total market. On the other hand, Cola Loca is potentially one of only a few competitors sharing a large customer base. Even if the total market size is less for Cola, Cola Loca can still maintain a larger proportion of consumers.

In addition to the previous point, Cola Loca may be less expensive to produce than Early Bird Coffee. Cola is likely just water and sugar with some mix of artificial flavoring. As such, while less cola may be sold, higher profits can be obtained which makes the investment worthwhile. Potentially coffee beans are expensive and require significant processing (growing, picking, roasting, crushing, filtering, pouring, etc.). The result is that on a per customer basis, Early Bird Coffee makes significantly less than Cola Loca.

In conclusion, this argument, while strong and appropriate, does not fully take into account all factors which could influence the decisions to switch investments. If the population is shifting differently than the investors are expecting, the proportional marketshare of Cola Loca is larger, and if the profit margins are better for Cola Loca, then a good investment decision would be to keep Investments in Cola Loca.
Joined: 28 Sep 2017
Posts: 85
Location: India
Concentration: General Management
GMAT 1: 740 Q49 V42
GPA: 3.92
Premium Member
Re: Analytical Assessment: Please review my essay  [#permalink]

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New post 07 Oct 2017, 18:17
Let me first add, that i am not an expert at this.
However i will still try to see if i can help you with this.

The structure seems decent.
The grammar and the reasoning seems decent as well.
Overall the essay seems quite decent.

However i would like to add a couple of points.
First, try to make it min 500 words. I would say take it to atleast 520 to 530 words.
Second try to add real life examples to your essay.
Otherwise it looks good. !!!

The thing about privilege is.. you often don't recognize your own !!!

Joined: 02 Nov 2016
Posts: 7
Re: Analytical Assessment: Please review my essay  [#permalink]

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New post 07 Oct 2017, 20:24
The author of the argument claims that investments should be transferred from Early Bird Coffee to Cola Loca. He or she supports this claim using studies that suggest coffee consumption increases as one ages from 10 to 60, while cola consumption will decrease. However, the author of this argument relies on many assumptions that do not have supporting evidence and uses illogical reasoning to draw unwarranted conclusions. Therefore, the argument is weak and unconvincing, and has several flaws.

Firstly, the author compares the consumption rates between coffee and cola. However, the author fails to state the raw values in increase and decreases, and the baseline consumption values. For example, if coffee only increase 1% per annum while cola decreases 0.01% per annum, a shift in investment to coffee wouldn’t make sense if coffee is rarely consumed while cola is very frequently consumed. The author needs to study the consumption patterns more carefully and consider the raw increase and decreases before make a recommendation that it would be a wise decision to shift investments.

Although the trends described by the studies are stated to be stable for the past 40 years, it is not unreasonable to believe trends to break. With today’s power of social media to advertise and today’s population that is willing to follow fads, we can not discount the possibility that a third option, such as an energy drink, may affect the past consumption patterns of coffee and cola. For example, energy drinks can serve the same purpose to rejuvenate energy as coffee, while it is also sweet enough to serve as a substitute for cola. In order for this argument to hold true, we must assume that there will not be other factors that can affect consumption patterns. Therefore, the author needs to provide enough evidence to demonstrate that these rates are resist to changes and will likely hold true for the future.

The author also introduced two companies, Cola Loca and Early Bird Coffee, in his or her claim which appear to be out of the scope of the supporting evidence presented in the argument. No evidence was presented as to why Early Bird Coffee was a specific company chosen out of the pool of potential investments. For example, Early Bird Coffee could be a start-up company with a very poor management team. Although it is a coffee company, it may not be wise to invest in this company if Cola Loca is a far more established company with a monopoly in the cola market. Therefore, the author needs to present a more careful analysis the different available choices for investments before advising to shift from Cola Loca to Early Bird Coffee. If this analysis is not presented, it leaves his or her argument up for debate.

In conclusion, the argument is neither compelling nor persuasive. Because the author’s argument omits several key issues, it is poorly supported. If the author had back up his or her points with conclusive evidence and included the items discussed above, then the argument would have been more thorough and convincing.
GMAT Club Bot
Re: Analytical Assessment: Please review my essay &nbs [#permalink] 07 Oct 2017, 20:24
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