This past year, we spent almost as much on advertising as did our main

Using the unofficial AWA grader GMATAWA, here is what I have:




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The following appeared in a memorandum from the vice president of Road Food, an international chain of fast-food
restaurants:
“This past year, we spent almost as much on advertising as did our main competitor, Street Eats, which has fewer
restaurants than we do. Although it appeared at first that our advertising agency had created a campaign along the
lines we suggested, in fact our total profits were lower than those of Street Eats. In order to motivate our advertising
agency to perform better, we should start basing the amount that we pay it on how much total profit we make each
year.”
Discuss how well reasoned . . . etc.
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The argument claims that linking monetary benefits based on the profits to the advertising agency would help the food chain outperform Street Eats. Stated in such a way the argument is inconclusive of the data supporting the hypothesis, tends to manipulate facts to present a distorted view of reality and is a leap of faith reasoning without clear outcomes. In sum, the argument could have been presented in a much improvised way with more relevant and supporting fact sheet on which the assumption depends.

Firstly the argument states that we spent equivalently to our competitor Street Eats over the advertisement which has a fewer outlets in city as compared to ours. The hypothesis is a paradoxical situation in which the author claims that even though Street Eats has fewer outlets and spends same as us, they still manage better profits than ours outlets and the causative analysis still unknown while reasoning is that the ad company helps make them better profit making. This cause and effect could have been justified if presented with examples such as revenue, profit sheets, balance sheets or the ad expense cash ratio on which the profits were aligned. So solely relying on a single parameter that too not corroborative is a wrong thought process.

Secondly the argument claims that profit margins as compared to Street Eats could have been lessened if the payment of the advertising agency would be linked with profits. This data is again unreliable and not authentic as it fails to address the key strategies to achieve the result. The losses or lessened profits could much be attributed to lower staff, less trained staffs, less inventory, less menu items, low number of dishes or the outlets in those area where the footfalls are less. Unless these datas are worked upon and author fails to recognise the same, it would be more of a wishful thought process than to face the reality and is a vague to author’s claim.

Finally the argument should answer to questions such as: Why not other factors have been taken under considerations? What should be efforts undertaken apart from profit linking strategy of the restaurant as compared to its peers Street Eats? How will the ad agency be used in a different way to improve profitability? Without convincing answers and without cognitive approach, the whole idea to turn around profitability of restaurant is more of a wishful thought process instead of being conducive.

In conclusion the argument is flawed for above mentioned reasons and is therefore unconvincing. It would be much stronger if the author would have explicitly stated the cause and effect analysis by taking other factors under consideration. In order to access the merits of the decision, it would be essential to have full knowledge of the contributing factors, without which the argument remains open to debate.


Please review my approach

Q: This past year, we spent almost as much on advertising as did our main competitor, Street Eats, which has fewer restaurants than we do. Although it appeared at first that our advertising agency had created a campaign along the lines we suggested, in fact our total profits were lower than those of Street Eats. In order to motivate our advertising agency to perform better, we should start basing the amount that we pay it on how much total profit we make each year.

Essay Format

The argument claims that linking monetary benefits based on the profits to the advertising agency would help the food chain outperform Street Eats. Stated in such a way the argument is inconclusive of the data supporting the hypothesis, tends to manipulate facts to present a distorted view of reality and is a leap of faith reasoning without clear outcomes. In sum, the argument could have been presented in a much improvised way with more relevant and supporting fact sheet on which the assumption depends.

Firstly the argument states that we spent equivalently to our competitor Street Eats over the advertisement which has a fewer outlets in city as compared to ours. The hypothesis is a paradoxical situation in which the author claims that even though Street Eats has fewer outlets and spends same as us, they still manage better profits than ours outlets and the causative analysis still unknown while reasoning is that the ad company helps make them better profit making. This cause and effect could have been justified if presented with examples such as revenue, profit sheets, balance sheets or the ad expense cash ratio on which the profits were aligned. So solely relying on a single parameter that too not corroborative is a wrong thought process.

Secondly the argument claims that profit margins as compared to Street Eats could have been lessened if the payment of the advertising agency would be linked with profits. This data is again unreliable and not authentic as it fails to address the key strategies to achieve the result. The losses or lessened profits could much be attributed to lower staff, less trained staffs, less inventory, less menu items, low number of dishes or the outlets in those area where the footfalls are less. Unless these datas are worked upon and author fails to recognise the same, it would be more of a wishful thought process than to face the reality and is a vague to author’s claim.

Finally the argument should answer to questions such as: Why not other factors have been taken under considerations? What should be efforts undertaken apart from profit linking strategy of the restaurant as compared to its peers Street Eats? How will the ad agency be used in a different way to improve profitability? Without convincing answers and without cognitive approach, the whole idea to turn around profitability of restaurant is more of a wishful thought process instead of being conducive.

In conclusion the argument is flawed for above mentioned reasons and is therefore unconvincing. It would be much stronger if the author would have explicitly stated the cause and effect analysis by taking other factors under consideration. In order to access the merits of the decision, it would be essential to have full knowledge of the contributing factors, without which the argument remains open to debate.

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