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Re: Car company's lagging sales [#permalink]
kdraj: I too agree with you, I also had the same reasoning and chose A instead.
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Re: Car company's lagging sales [#permalink]
Quote:
my explanations are highlighted

As part of a plan to overhaul a car company's lagging sales due to its image as environmentally irresponsible, consultants recently proposed the release of a new car line. The new line of small, high-mileage and hybrid vehicles would appeal to a set of consumers who would never have previously considered buying from the company. In that way, the company could easily retain the market for its traditional vehicles while tapping into a new market niche and expanding its revenue base.

Which of the following, if true, would most strongly support the consultants' proposal?

(A) The majority of cars currently manufactured by the company are large and are not known for their fuel efficiency. (There is no discussion about fuel efficieny in the paragraph. You assumed environmentally irresponsible meant fuel, but it could be emmissions and not fuel conservation
(B) A reliable survey of the company's previous customers showed that most of them would more strongly consider buying from the company again if it offered hybrid vehicles. (hybrid vehicles would appeal - says B is the answer
(C) Car sales for all companies have lagged in the last two years, but are expected to increase in the next six months. That has nothing to do with hybrids too general
(D) A new focus on small, high-mileage, and hybrid vehicles would require research and development investment greater than the company's CEO has made in his tenure to date. Too much of reach here
(E) As most car companies develop small, high-mileage, and hybrid vehicles, the profit margins in this competitive arena are expected to shrink. this is about sales not about profits

Can anyone help me why option A is wrong.
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Re: As part of a plan to overhaul a car company's lagging sales [#permalink]
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This question is from GMAT Hacks daily question of the day archive. I'm not sure when this question originally appeared on Jeff Sackmann's site but it reappeared on January 1, 2013. Here is the link to the question from 2013
https://www.gmathacks.com/daily/20130101-gmat-question-of-the-day.html

The Official Explanation is as follows:

Answer: B This is a strengthen question. The proposal involves releasing a new line of small, high-mileage, and hybrid vehicles, which don't appear to have previously been the company's strong suit. The argument assumes that releasing the new line will have the effect of increasing revenue without losing its current customer base. Consider each choice in turn:

(A) This choice suggests that the company has a lot of improvements to make, but it doesn't tell us whether those improvements, as suggested by the consultants, would have the desired impact.
(B) This is correct. The survey (a "reliable" one, so we don't have to worry about sampling issues) addresses the potential concern that the company would lose its previous customers, who were not customers of smaller or hybrid vehicles.(C) This weakens the argument somewhat, suggesting that perhaps this car company's sales lagged only because of industry-wide declines.
(D) This is irrelevant. The argument is concerned with revenue, not with costs.
(E) As with (D), this choice is not relevant to expanding "revenue" base. Profit margins consider both revenue and cost. In order for this choice to be correct, we would need to know that developing this type of vehicle would cause revenues to shrink, not just profits.


Originally posted by avohden on 03 Oct 2013, 22:51.
Last edited by avohden on 19 Nov 2013, 10:49, edited 1 time in total.
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Re: As part of a plan to overhaul a car company's lagging sales [#permalink]
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subhajeet wrote:
As part of a plan to overhaul a car company's lagging sales due to its image as environmentally irresponsible, consultants recently proposed the release of a new car line. The new line of small, high-mileage and hybrid vehicles would appeal to a set of consumers who would never have previously considered buying from the company. In that way, the company could easily retain the market for its traditional vehicles while tapping into a new market niche and expanding its revenue base.

Which of the following, if true, would most strongly support the consultants' proposal?

(A) The majority of cars currently manufactured by the company are large and are not known for their fuel efficiency.
(B) A reliable survey of the company's previous customers showed that most of them would more strongly consider buying from the company again if it offered hybrid vehicles.
(C) Car sales for all companies have lagged in the last two years, but are expected to increase in the next six months.
(D) A new focus on small, high-mileage, and hybrid vehicles would require research and development investment greater than the company's CEO has made in his tenure to date.
(E) As most car companies develop small, high-mileage, and hybrid vehicles, the profit margins in this competitive arena are expected to shrink.

Can anyone help me why option A is wrong.


Hey all, I have a bit of a hard time understanding this one.
Is there any good analysis made in this question, maybe someone could give it a shot and earn some Kudos from me!

I'll give it a shot but not quite sure about this one, let's see
Stimulus - So it is basically saying that their plan is to get new customers to buy more cars that will be a new line of hybrid and high mileage.
Question- So what would strengthen this?
Answer Choices- A) This one could be, since it means that current customers are different that potential customers. So i'll keep this one
B) Not too sure what this one means, says that current customers would buy again. But in stimulus it says that the new model would appeal to a set of consumers who would never have previously considered buying from the company. So I guess it contradicts somehow. I don't honestly think this is the correct one
C) So what? Out of scope
D) Out of scope, I don't give a heck about R+D
E) Out of scope too, we don't care about profit margins

So IMO it is A
Happy to discuss with anyone
Cheers
J :)

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Re: As part of a plan to overhaul a car company's lagging sales [#permalink]
IMO b, coz the question stem is asking wat will support the proposal, that the new car will sell. Option A can have both good and negative impacts, such as due to old image ppl wont buy new hybrid cars too.
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Re: As part of a plan to overhaul a car company's lagging sales [#permalink]
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).

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Re: As part of a plan to overhaul a car company's lagging sales [#permalink]
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