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CR: takeover

Vithal

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14 Jun 2005, 22:08

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wild_desperado

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14 Jun 2005, 22:14

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E.........

sparky

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14 Jun 2005, 22:25

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sparky

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14 Jun 2005, 22:26

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sonaketu

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14 Jun 2005, 22:49

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One more for E.

cloudz9

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15 Jun 2005, 00:36

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E from me too...

none of the others fit it

Vithal

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15 Jun 2005, 05:43

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I was with E too..but the OA is D!!

Arsene_Wenger

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15 Jun 2005, 05:48

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(E) too.

rthothad

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15 Jun 2005, 06:05

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One more for E
vithal, what is the source.

Vithal

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15 Jun 2005, 06:13

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rthothad

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15 Jun 2005, 06:17

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Vithal

Any OE

riteshgupta1

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15 Jun 2005, 06:40

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I agree with D, I dont think E weekens it.

All E says, smallar companies will increase their productivity but the argument says that 2/3 of the market is owned by Downey and increasing the price will impact the economy for companies who depend on it. So, analysts are wrong, they will not increase the price of ball bearing as profit margins are very low because of a reason (they sell in mass volume) but might increase for other products downey makes where profit margins are better.

This answer,D, makes the argument less plausible instead of weeking it to death.

ywilfred

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15 Jun 2005, 08:31

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Conclusion:
D triples price of ball bearing -> lead to crisis for industries that depend on ball bearing -> contrbute to weakening of economy

In D, it says that the profit margin is greater in D's secondary product. So F will most likely increase the price for those products to capitalize on the higher proftis and use it to pay off their enormous debt.

In E, we're told that smaller companies will expand to satisfy the market for cheaper ball bearings. But we do not know if their will fill the void created by D sufficiently, or whether their pricing will remain competitive with respect to D's pricing prior to the takeover.

Both D and E requires a fair bit of assumption. We're assuming that D's secondary product sells well, and so increasing their price will generate the income F needs.

In E, we're assuming that the small companies do not have the capability to provide the industry with low priced ball bearings.

I would say it's quite balanced between those two choices. I really can't convince myself fully to pick either D or E

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