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

Question

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

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OE:

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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! 
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Revised/edited Version of this question is  HERE (V10-30) .

TOPIC IS LOCKED AND ARCHIVED.

broall · Answer

Between A & C, I would choose A. C is a really good contender.

rocko911 · Answer

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

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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.....

SISDIT · Answer

IMO A. The decrease in percentage of market share 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

Sent from my SM-T116NU using GMAT Club Forum mobile app

emockus · Answer

I was between A and C and went with A.

gayatriv21 · Answer

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.

SISDIT · Answer

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

Sent from my SM-T116NU using GMAT Club Forum mobile app

SISDIT · Answer

Hi Lucy Phuong, Kindly provide OA and shed some light on this question. Thanks and Kudo

Lucy Phuong · Answer

Just read the OE and the article where the sentence in option (C) is extracted from, warriorguy . I'm glad to hear your thoughts

warriorguy · Answer

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.

.

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).

Lucy Phuong · Answer

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.

Lucy Phuong · Answer

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.

warriorguy · Answer

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.

Lucy Phuong · Answer

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

Lucy Phuong · Answer

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!

SISDIT · Answer

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

Lucy Phuong · Answer

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  . In the same fashion, "increased to almost 40%" would mean  . That's it.

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

SISDIT · Answer

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 Sent from my SM-T116NU using GMAT Club Forum mobile app

Lucy Phuong · Answer

Glad to know that! 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

warriorguy · Answer

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.

Let me know your thoughts.

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

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