Companies whose products and product manufacturing processes have a

Question

Companies whose products and product manufacturing processes have a physical presence are typically called brick and mortar companies (B&M companies). Automobile manufacturing companies are a good example of this category. On the other hand, Digital Firms are those whose products have only a virtual presence. Email services, social media, and e-commerce platforms fall under this category.

There are several factors that have a tangible impact on the growth and functioning of companies of both categories. One of them is the skill requirement for labor. B&M companies do not usually require labor that is skilled in various disciplines. In fact, they merely require hardworking labor. The company can train any laborer with a specific skill set required to meet its production goals. Digital Firms – on the other hand – require workers who have a multi-disciplinary skill set and are comfortable with the cross-functional application of knowledge. For instance, a worker in an automobile manufacturing unit has a very specific role, such as doing a quality check of a particular part or ensuring that the parts on the assembly line are according to the given specifications, etc. A programmer in a software company, on the other hand, is expected to possess knowledge related to various aspects such as customer needs, user interface design, user experience, etc., and to apply such knowledge to some extent while building the software. Additionally, B&M companies cannot thrive under restrictive government policies, whereas Digital Firms are rarely impacted by such policies, owing to their virtual presence. Also, when it comes to physical resources such as metal ore, heavy machinery, buildings, etc., B&M companies’ functioning is significantly impacted by their availability, while digital firms’ functioning isn’t as much impacted as long as their servers are powered.

Such differences in the conditions needed for the growth and functioning of these firms, due to the impact of various factors are clearly evident in the choice of geographical locations. Automobile manufacturers, heavy machinery manufacturers, and other such brick and mortar companies are primarily based out of Europe – the region with lots of resource availability, labor that can be easily trained for specific jobs, and a wide range of government policies across various countries providing a diverse range of options to choose from for industrialists. Most of the established Social media companies, email service providers, etc. are based out of North America and China. In fact, the world’s top 15 digital firms are either American or Chinese. North America is a land that attracts a huge number of skilled immigrants, the kind of people best suited for jobs in digital firms. The restrictive government policies in North America and China significantly hamper the profit-making endeavors of any brick and mortar companies while allowing easier growth opportunities for digital firms. Similarly, the restrictive data policies in Europe make it difficult for digital firms to thrive in that region. Clearly, the majority of the B&M companies of Europe would have a hard time surviving in the American or the Chinese environment.    1 
 1. What is the main point of the passage?

A. To point out the problems faced by brick and mortar companies
B. To point out the difficulties faced by entrepreneurs of digital firms
C. To explain the factors that affect the growth of B&M companies and compare them with that of digital firms
D. To illustrate that brick and mortar companies likely cannot thrive in the same environment as digital firms do, due to a difference in conditions needed for each of these company types to function and grow
E. To show how digital firms thrive in the American and Chinese economies

2 
 2. Which of the following can be inferred from the passage?

A. Car manufacturing companies do not have as much necessity to hire workers with multi-disciplinary skillset as digital firms do.
B. Physical resources are equally important for B&M companies and digital firms alike.
C. Geographical location has a huge impact on the production capacity of automobile manufacturing firms.
D. Doing a quality check of a particular part in an automobile manufacturing company requires a combination of skills.
E. User interface design and user experience are two skills that are optional for workers in a software company.

3 
 3. The passage does not support which of the following statements.

A. Automobile manufacturing companies are primarily located in Europe.
B. Not many of the top 15 digital firms are based out of Europe.
C. Social media companies are considered digital firms.
D. The conditions in Chinese economy are geared towards an encouraging environment for digital firms.
E. There is no digital firm that offers social media services or email services that is based out of Europe.

4 
 4. In the context of the passage as a whole, the second paragraph is primarily intended to

A. Introduce the concepts of B&M companies and digital firms
B. Illustrate how certain factors impact B&M companies differently from digital firms, leading to a difference in conditions favourable for these companies
C. Map the growth factors of these companies with the conditions of the geographical locations they are primarily situated in.
D. To explain why digital firms cannot thrive in the same location as B&M companies
E. To explain why B&M companies cannot thrive in the same location as digital firms

RC Butler 2022  -  Practice Two RC Passages Everyday.   
Passage # 167 Date: 26-Apr-2022
 This question is a part of RC Butler 2022 .  Click here for Details

Elprofessor · Answer

In Q2, why A is a better answer than C??  Sajjad1994

Sajjad1994 · Answer

Official Explanation

2. Which of the following can be inferred from the passage?

Difficulty Level:   Medium

Explanation

(A)  Correct.   This can be inferred.

“B&M companies do not usually require labor that are skilled in various disciplines.”

Car manufacturing companies are B&M companies. Hence, as per the passage, they would not have as much necessity for workers with skills in multiple disciplines, as digital firms, which require labour skilled in various disciplines, have. This is a valid inference.

(B) Incorrect.

“Also, when it comes to physical resources such as metal ore, heavy machinery, buildings, etc., B&M companies’ functioning is significantly impacted by their availability while digital firms’ functioning isn’t as much impacted as long as their servers are powered."

So, the availability of physical resources is critical for B&M companies, but not so much for digital firms. Hence, they cannot be equally important for both types of companies.

(C)  Out of scope. We do not know anything about production capacity. It is not mentioned in the passage.

(D) Incorrect. Opposite.

“For instance, a worker in an automobile manufacturing unit has a very specific function assigned to him such as doing a quality check of a particular part…”

As per the passage, a quality check is an activity that requires a single skill (very specific function), not a combination of skills.

(E) Incorrect. Opposite.

“A programmer in a software company, on the other hand, is expected to possess knowledge related to various aspects such as customer needs, user interface design, user experience etc. and to apply such knowledge to some extent while building the software.”

The passage indicates the opposite. A worker in a software company is expected to possess knowledge in these fields (hence, not optional).

Answer: A

akshitagoel08 · Answer

why d over c for ques1?  Sajjad1994

Sajjad1994 · Answer

Official Explanation

1. What is the main point of the passage?

Difficulty Level:   700

Paragraph Summaries

Para 1

To introduce two different categories of company – Brick and Mortar (B&M) and Digital

Para 2

To explain how certain factors impact B&Ms differently from digital firms, leading to different conditions for these companies to thrive

Para 3

-To demonstrate how the conditions needed for each type of company determines location and

-To conclude that B&M companies will find it difficult to survive in a location conducive to the Digital firms

(A) Partial Scope:  The passage mentions some of the problems faced by B&M companies, but that is not the main idea behind the passage.

(B) Partial scope.  The passage mentions some of the problems faced by digital firms (and so, their entrepreneurs). But this is not the central idea of the passage.

(C) Partial scope.  The passage definitely explains the factors impacting growth and functioning of both B&M and digital companies. However, it goes beyond to explain how these factors create different conditions, which decide the location of these companies. Based on this explanation, the author finally concludes that companies of one type will find it difficult to survive in an environment conducive to the other type. However, these critical points are missing in option C.

(D)  Correct.   In line with prethinking. This option captures the essence of the passage well – both the final conclusion made (B&M companies may struggle in environments conducive to digital firms), and the reasons for it (the difference in required conditions for growth for both the types of companies) are mentioned

(E) Incorrect.  The passage explains why digital firms thrive in the American and Chinese economies (due to an environment that is conducive for them). It does not actually discuss how these firms thrive (i.e. what do these firms do to thrive). More importantly, this is not the central idea of the passage. The core idea in the passage is that B&M companies will not likely thrive in countries conducive for digital firms because of the difference in conditions needed by these companies; it is not about how or why digital firms thrive in North America/China.

Answer: D

ems1999 · Answer

3. The passage does not support which of the following statements.

A. Automobile manufacturing companies are primarily located in Europe.  No 
 Automobile manufacturers, heavy machinery manufacturers, and other such brick and mortar companies are primarily based out of Europe – the region with lots of resource availability, labor that can be easily trained for specific jobs, and a wide range of government policies across various countries providing a diverse range of options to choose from for industrialists.

B. Not many of the top 15 digital firms are based out of Europe. Tricky, but  no , because none of the top 15 are based out of Europe.
 In fact, the world’s top 15 digital firms are either American or Chinese.

C. Social media companies are considered digital firms.  No 
 On the other hand, Digital Firms are those whose products have only a virtual presence. Email services, social media, and e-commerce platforms fall under this category.

D. The conditions in Chinese economy are geared towards an encouraging environment for digital firms.  No 
 In fact, the world’s top 15 digital firms are either American or Chinese.

E. There is no digital firm that offers social media services or email services that is based out of Europe.  Tricky but yes. 
None is extreme, I (or any other madman) could start something tomorrow, and there will be at least one.

suman94 · Answer

For question 3, both option B and E seems to be correct.

I get that Option E is inferred from the passage since it is not mentioned anywhere specifically.

But for Option B, the word "Not many" seems to be confusing, which means few (not zero) of the top 15 companies are based out of Europe, which the passage categorically deny in one of the lines. ("All of the top 15 companies are either American or Chinese")

gmatPreper001 · Answer

Even I am having the same doubt, did you understand on why its E and not B?

Companies whose products and product manufacturing processes have a

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Companies whose products and product manufacturing processes have a

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