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# Company executive: Ten years ago, we held an 80% market share

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Company executive: Ten years ago, we held an 80% market share  [#permalink]

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Updated on: 08 Jul 2017, 05:08
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Company executive: Ten years ago, we held an 80% market share in Japan, even though we are a U.S.-based company. At that time, Japanese consumers overwhelmingly preferred our products to those locally produced in Japan. Over the past ten years, our market share in Japan has decreased to almost 40%. However, our revenue from the Japanese has actually increased.

Which of the following best help to explain the above discrepancy?

A. The size of the company market for the company's product has double over the past ten years
B. The population of Japan has remained the same over the past ten years
C. The company has increased its selling price for the product over the past ten years
D. Over the past ten years, local Japanese manufacturers have introduced a number of low cost products that compete with the company's product line
E. Consumer sentiment in Japan has shifted away from imported goods and towards domestically produced goods

----

OE: [as below in my post]

----
Dear experts GMATNinja, I just had a related question that is, when it's said "A decreased to almost 40%", is there any case that A could decrease to 39% or some percentage that is a little less than 40%? In my opinion, "almost 40%" means a little either higher or lower than 40%. What do you think about this? Please shed some light on it. Thank you!
---> [The concern has been solved. Answer will be provided below too]

Originally posted by Lucy Phuong on 05 Jul 2017, 02:38.
Last edited by Lucy Phuong on 08 Jul 2017, 05:08, edited 2 times in total.
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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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05 Jul 2017, 03:05
Between A & C, I would choose A. C is a really good contender.
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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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05 Jul 2017, 11:15
[quote="Lucy Phuong"]Company executive: Ten years ago, we held an 80% market share in Japan, even though we are a U.S.-based company. At that time, Japanese consumers overwhelmingly preferred our products those locally produced in Japan. Over the past ten years, our market share in Japan has decreased to almost 40%. However, our revenue from the Japanese has actually increased.

Which of the following best help to explain the above discrepancy?

A. The size of the company market for the company's product has double over the past ten years
B. The population of Japan has remained the same over the past ten years
C. The company has increased its selling price for the product over the past ten years
D. Over the past ten years, local Japanese manufacturers have introduced a number of low cost products that compete with the company's product line
E. Consumer sentiment in Japan has shifted away from imported goods and towards domestically produced goods

----
OA will be provided upon 5 replies with explanation.

will go for C

in A the size doesn't matter because maybe the company has increased its size outside japan and they must be getting good revenue from there but not from japan.....
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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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05 Jul 2017, 12:19
Lucy Phuong wrote:
Company executive: Ten years ago, we held an 80% market share in Japan, even though we are a U.S.-based company. At that time, Japanese consumers overwhelmingly preferred our products those locally produced in Japan. Over the past ten years, our market share in Japan has decreased to almost 40%. However, our revenue from the Japanese has actually increased.

Which of the following best help to explain the above discrepancy?

A. The size of the company market for the company's product has double over the past ten years
B. The population of Japan has remained the same over the past ten years
C. The company has increased its selling price for the product over the past ten years
D. Over the past ten years, local Japanese manufacturers have introduced a number of low cost products that compete with the company's product line
E. Consumer sentiment in Japan has shifted away from imported goods and towards domestically produced goods

----
OA will be provided upon 5 replies with explanation.

----
Dear experts GMATNinja, I just had a related question that is, when it's said "A decreased to almost 40%", is there any case that A could decrease to 39% or some percentage that is a little less than 40%? In my opinion, "almost 40%" means a little either higher or lower than 40%. What do you think about this? Please shed some light on it. Thank you!

IMO A.

The decrease in percentage of market share [from 80% to 40%] does not mean there is a decline in the real total number of customers.

Option A shows that the real total number of customers, which is the size of market, has doubled. This means that the company is actually getting twice as much customers as it was.

This increase in real total number of customers offsets the decline in market share and even leads to the increase in revenue.

Just my 2 cents

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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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05 Jul 2017, 13:07
I was between A and C and went with A.
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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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07 Jul 2017, 06:49
I think It is C.he Selling price increased and hence the revenue.For A Market share decreased and market price increase? Do not find any relation.
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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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07 Jul 2017, 06:58
gayatriv21 wrote:
I think It is C.he Selling price increased and hence the revenue.For A Market share decreased and market price increase? Do not find any relation.

Hi gayatriv21,

Revenue = Selling price x Total number of products sold.

The increase in Selling price does not guarantee the increase in Revenue.

What if Selling price slightly increases and Total number of products sold significantly decreases?

This scenario would lead to the decrease in revenue.

Just my 2 cents [because we have not got OA yet ]

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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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08 Jul 2017, 03:22
Hi Lucy Phuong,

Kindly provide OA and shed some light on this question.

Thanks and Kudo
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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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08 Jul 2017, 03:45
Just read the OE and the article where the sentence in option (C) is extracted from, warriorguy.

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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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08 Jul 2017, 04:17
Lucy Phuong wrote:
Just read the OE and the article where the sentence in option (C) is extracted from, warriorguy.

Hello Lucy,

I am not sure I followed your question. In between, do we need a 'than' in the argument? Else, option (E) which relies on imported goods seems awkward.

Quote:
At that time, Japanese consumers overwhelmingly preferred our products than those locally produced in Japan.
.

As per my understanding, market share depends on the revenue generated and goods sold.

If the market share has declined, it could indicate that more people entered the market.
If the market share has increased, then it could be that the company actually captured that market % or many competitors went out of business.

So here, we have market share which went down but still revenue increased. It is possible that more people entered the market so share reduced from 80% to 40%.

The discrepancy is increase in revenue.

I will go with option A in this case since it is a clear indicator that the size of the market grew - If the size of the market doubled over the past 10 years, it shows that there would be an increase in revenue.

In Option C, we don't know how much was the increase? Was it sufficient to counter the loss? We don't know. We need more information to select C to resolve the discrepancy.

IMO, Option (A).
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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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08 Jul 2017, 04:29
Hi warriorguy,

Sorry, I mistakenly tagged you in wrong topic (this one). Anyway, thanks for your response on this question. Actually, my concern in the last lines (about the phrase "decrease to almost...") has been solved by GMATNinja. I will post OA and OE now.

The intended question should be this one https://gmatclub.com/forum/shortly-afte ... l#p1884188. Feel free to share your thoughts.
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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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08 Jul 2017, 04:49
Hi guys, this is official explanation:

(A) Correct. If the size of the market double and the company is getting 40% of the sales, this results in an overall higher amount of sales today than sales ten years ago. To demonstrate, 40.01% of 200 is greater than 80% of 100.

(B) This does not explain why revenue increased while market share was lost.

(C) The company maybe selling its product at a higher price, but it’s not clear that this is enough to overcome the large drop in market share.

(D) This suggest a reason for the drop in market share, but not for the increase in revenue.

(E) This simply restates the fact that the U.S. company has lost market share.
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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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08 Jul 2017, 05:04
1
Lucy Phuong wrote:
Hi guys, this is official explanation:

(A) Correct. If the size of the market double and the company is getting 40% of the sales, this results in an overall higher amount of sales today than sales ten years ago. To demonstrate, 40.01% of 200 is greater than 80% of 100.

(B) This does not explain why revenue increased while market share was lost.

(C) The company maybe selling its product at a higher price, but it’s not clear that this is enough to overcome the large drop in market share.

(D) This suggest a reason for the drop in market share, but not for the increase in revenue.

(E) This simply restates the fact that the U.S. company has lost market share.

Thank you. Is below sentence correct from your question? Or did you miss any keyword. I feel it lacks a 'than'.

At that time, Japanese consumers overwhelmingly preferred our products those locally produced in Japan.
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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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08 Jul 2017, 05:08
warriorguy wrote:

Thank you. Is below sentence correct from your question? Or did you miss any keyword. I feel it lacks a 'than'.

At that time, Japanese consumers overwhelmingly preferred our products those locally produced in Japan.

Sorry, that's a typo. It should be "to" instead. I've updated accordingly.

Thank you. +kudos to you
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Company executive: Ten years ago, we held an 80% market share  [#permalink]

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08 Jul 2017, 05:13
For those who have the same concern.

When I attempted this question, I could eliminate options (B), (D) and (E), and had (A) and (C) remained as contenders.
Evaluating option (A), I’m quite confused what is proper meaning of the phrase “decreased to almost 40%”. At that time, I thought that this phrase refer both “decreased to a little bit higher than 40%” and “decreased to a little bit lower than 40%”. In other words, it leads to 2 scenario:

1/ Company’s market share reached somewhere more than 40% total market, let’s say 41%
2/ Company’s market share reached somewhere less than 40% total market, let’s say 39%
Just imagine, Total market share is 100
10 years ago, company’s market share was 80% --> 80% x 100 = 80

Option (A) says:
A. The size of the company market for the company's product has double over the past ten years
It means total market has increased to: 2 x 100 = 200. Then, according to 2 above scenario, we have the following results:

1/ Current market share of the company: 41% x 200 = 82 ( > 80 )
2/ Current market share of the company: 39% x 200 = 78 ( < 80 )
You can see that 2 cases result in 2 different answers, and only the first case can help resolve the paradox of decreased market share and increased revenue.

Finally, I got help from GMATNinja. He explained that “decreased to almost 40%” means decreased to somewhere a little bit more than 40% only. In other words, only the first case is proper understanding.

Hope this helps!
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Company executive: Ten years ago, we held an 80% market share  [#permalink]

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08 Jul 2017, 06:02
2
Hi all,

According to formal written English I have learnt so far, "decreased to almost 40%" means the LEFTOVER is approximate to 40%, but definitely less than 40%.

It is weird to say that “decreased to almost 40%” means decreased to somewhere a little bit more than 40% only.

So, probably there is a typo in the phrase of “decreased to almost 40%”. It is quite clear to replace "to" by "by". Then the phrase could be "decreased by almost 40%".

Accordingly, we will have 3 things:

1. Before = 80%

2. Amount of change = [something less than 40%]

3. After = 80% - [something less than 40%] = [something greater than 40%], which properly fits the reasoning in option A.

Just my 2 cents
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Company executive: Ten years ago, we held an 80% market share  [#permalink]

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08 Jul 2017, 08:31
1
SISDIT wrote:
Hi all,

According to formal written English I have learnt so far, "decreased to almost 40%" means the LEFTOVER is approximate to 40%, but definitely less than 40%.

It is weird to say that “decreased to almost 40%” means decreased to somewhere a little bit more than 40% only.

So, probably there is a typo in the phrase of “decreased to almost 40%”. It is quite clear to replace "to" by "by". Then the phrase could be "decreased by almost 40%".

Accordingly, we will have 3 things:

1. Before = 80%

2. Amount of change = [something less than 40%]

3. After = 80% - [something less than 40%] = [something greater than 40%], which properly fits the reasoning in option A.

Just my 2 cents

I saw you chose (A) in the above post, so I guess u changed your mind?...

By the way, just wanna confirm that the latest update of the question is accurately cited from GMAT Club CAT. (I did take a screenshot). Therefore, there is no typo now. If any, maybe only author of the question knows...

Anw, regarding the "almost" topic, after careful consideration, I think that the usage of "almost to" is justified IN THIS CASE.

The following is just my personal reasoning. I recommend that you consult experts/ native speakers for better clarification.

As we may know, "almost" is quite similar to "nearly". It means something/someone nearly reaches a particular point, but actually not, just somewhere a little bit lower/smaller than that point. For instance:
- It is almost 10pm now. (--> The meaning could be: It is 9:50pm now)
- We have sold almost 100 pictures. (--> We have sold 97 pictures)
- At the age of 20, she has travelled to almost 30 countries. (--> maybe she has been to 28 countries)

But let's think, in all the above examples that represent usual usage of "almost", this adverb is used from perspective of "positive progress" (don't mind, I just created this name). In other words, "positive progress" describes something that starts at a lower point and finishes at a higher point.

- It comes without saying that a new day begin at 00:01am, then 00:02am,......., 8pm, 9pm, 10pm,...
- Right upon starting a business, we sold only 1, then 2 pictures... we continue to sell.. the number of pictures sold increased day by day
- The number of countries she has been to starts from 1, then 2,...., and finishes at 28 as of now.

But context of the question is another situation in which we should stand at the higher point (80%) looking down to the lower point (40%). That is why "decreased to almost 40%" should have the meaning of [decreased to somewhere a little bit higher than 40%. e.g. 41%]. In the same fashion, "increased to almost 40%" would mean [increased to somewhere a little bit lower than 40% e.g. 39%]. That's it.

Having said that, I think your suggested change is cool. I could understand it.. without any doubt.
+kudos to you.
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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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08 Jul 2017, 08:55
Lucy Phuong wrote:
SISDIT wrote:
Hi all,

According to formal written English I have learnt so far, "decreased to almost 40%" means the LEFTOVER is approximate to 40%, but definitely less than 40%.

It is weird to say that “decreased to almost 40%” means decreased to somewhere a little bit more than 40% only.

So, probably there is a typo in the phrase of “decreased to almost 40%”. It is quite clear to replace "to" by "by". Then the phrase could be "decreased by almost 40%".

Accordingly, we will have 3 things:

1. Before = 80%

2. Amount of change = [something less than 40%]

3. After = 80% - [something less than 40%] = [something greater than 40%], which properly fits the reasoning in option A.

Just my 2 cents

I saw you chose (A) in the above post, so I guess u changed your mind?...

By the way, just wanna confirm that the latest update of the question is accurately cited from GMAT Club CAT. (I did take a screenshot). Therefore, there is no typo now. If any, maybe only author of the question knows...

Anw, regarding the "almost" topic, after careful consideration, I think that the usage of "almost to" is justified IN THIS CASE.

The following is just my personal reasoning. I recommend that you consult experts/ native speakers for better clarification.

As we may know, "almost" is quite similar to "nearly". It means something/someone nearly reaches a particular point, but actually not, just somewhere a little bit lower/smaller than that point. For instance:
- It is almost 10pm now. (--> The meaning could be: It is 9:50pm now)
- We have sold almost 100 pictures. (--> We have sold 97 pictures)
- At the age of 20, she has travelled to almost 30 countries. (--> maybe she has been to 28 countries)

But let's think, in all the above examples that represent usual usage of "almost", this adverb is used from perspective of "positive progress" (don't mind, I just created this name). In other words, "positive progress" describes something that starts at a lower point and finishes at a higher point.

- It comes without saying that a new day begin at 00:01am, then 00:02am,......., 8pm, 9pm, 10pm,...
- Right upon starting a business, we sold only 1, then 2 pictures... we continue to sell.. the number of pictures sold increased day by day
- The number of countries she has been to starts from 1, then 2,...., and finishes at 28 as of now.

But context of the question is another situation in which we should stand at the higher point (80%) looking down to the lower point (40%). That is why "decreased to almost 40%" should have the meaning of [decreased to somewhere a little bit higher than 40%. e.g. 41%]. In the same fashion, "increased to almost 40%" would mean [increased to somewhere a little bit lower than 40% e.g. 39%]. That's it.

Having said that, I think your suggested change is cool. I could understand it.. without any doubt.
+kudos to you.

Hi bạn Lucy Phuong,

I am not a native speaker too

I did not change my mind, I strengthened it instead.

Thanks for your clarification. I did learn new thing from your information.

+1 kudos

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Company executive: Ten years ago, we held an 80% market share  [#permalink]

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08 Jul 2017, 09:16
SISDIT wrote:
Hi bạn Lucy Phuong,

I am not a native speaker too

I did not change my mind, I strengthened it instead.

Thanks for your clarification. I did learn new thing from your information.

+1 kudos

Btw, we just had an interesting discussion on an SC question here - https://gmatclub.com/forum/shortly-afte ... l#p1884418. Feel free to join in
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Re: Company executive: Ten years ago, we held an 80% market share  [#permalink]

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08 Jul 2017, 10:43
Lucy Phuong wrote:
For those who have the same concern.

When I attempted this question, I could eliminate options (B), (D) and (E), and had (A) and (C) remained as contenders.
Evaluating option (A), I’m quite confused what is proper meaning of the phrase “decreased to almost 40%”. At that time, I thought that this phrase refer both “decreased to a little bit higher than 40%” and “decreased to a little bit lower than 40%”. In other words, it leads to 2 scenario:

1/ Company’s market share reached somewhere more than 40% total market, let’s say 41%
2/ Company’s market share reached somewhere less than 40% total market, let’s say 39%
Just imagine, Total market share is 100
10 years ago, company’s market share was 80% --> 80% x 100 = 80

Option (A) says:
A. The size of the company market for the company's product has double over the past ten years
It means total market has increased to: 2 x 100 = 200. Then, according to 2 above scenario, we have the following results:

1/ Current market share of the company: 41% x 200 = 82 ( > 80 )
2/ Current market share of the company: 39% x 200 = 78 ( < 80 )
You can see that 2 cases result in 2 different answers, and only the first case can help resolve the paradox of decreased market share and increased revenue.

Finally, I got help from GMATNinja. He explained that “decreased to almost 40%” means decreased to somewhere a little bit more than 40% only. In other words, only the first case is proper understanding.

Hope this helps!

Quote:
Just imagine, Total market share is 100
10 years ago, company’s market share was 80% --> 80% x 100 = 80

Option (A) says:
A. The size of the company market for the company's product has double over the past ten years
It means total market has increased to: 2 x 100 = 200. Then, according to 2 above scenario, we have the following results:

1/ Current market share of the company: 41% x 200 = 82 ( > 80 )
2/ Current market share of the company: 39% x 200 = 78 ( < 80 )

In my opinion, there is a difference between market share and the size of the company market.

Lets say that for a given type of product, we have 1000 consumers and 3 competitors. So we have company A which has 80% share of the market i.e. 800 consumers prefer products of company A.

Now the market share decreased (probably because more people entered the market) but the size of the company market has doubled.

So now we have 1600 consumers instead of 800 consumers.

These 1600 consumers contribute to ~40% of the market share.

Re: Company executive: Ten years ago, we held an 80% market share   [#permalink] 08 Jul 2017, 10:43
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