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Learn what truly sets the UC Riverside MBA apart and how it helps in your professional growth
kulkarnios
Joined: 05 Jun 2013
Last visit: 28 Apr 2016
Posts: 34
Own Kudos:
Given Kudos: 31
Location: India
Concentration: Entrepreneurship, General Management
Schools: Madison '16 (D) Mays '16 IESE '16 Kelley '16 (D)
GMAT 1: 640 Q48 V29
GPA: 3.6
WE:Business Development (Education)
02 Dec 2013, 02:30
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"We are spending too much on free customer service after a sale has been made; we need to limit our warranty to two years in order to improve our profit margins. The current lifetime warranty can lead to costs decades into a product's life cycle. Also, we pay our customer service employees a premium because they must possess expert skills across the entirety of our very diverse product line, including products we no longer sell."
Every company's one of the ultimate goal is to improve profits. There are different approaches to it, be it increasing sales and hence revenue or by cutting costs or both. The above argument appeared in a memo to executives at a company. According to the argument, company spends too much on free customer service, and should limit the warranty to two years in order to improve profit margins. The current lifetime warranty leads to costs decades into a product's life cycle.Moreover, company pays customer service employees a premium for their expert skills across the entirety of diverse product line, including for products which are no longer sold. The argument presents a good case but with some assumptions and also lacks evidential support, making the argument shaky and unconvincing to the reader. Furthermore, a hiatus between premise and conclusion leaves the reader unacceptable of the conclusion.
Primarily, the author does not present any evidence for the premises he makes. For instance, how much is spent on the customer service after a sale is not entioned but just a comparative adjective is used to highlight it, instead a statistical data would have strengthened the premise. Also the author says to limit warranty to two years to improve profit margins, but fails to provide any strong evidence on which he comes to this period of two years, nor does he mention by what factor the profit margins would improve. All this creates a lacunae in our mind.
Secondarily, argument assumes the products life cycle goes into decades and hence they need to provide service for decades. What is the life span is just 3 or 4 years, the entire argument crumbles. Moreover, argument fails to point out what are the strengths of the company, what if it is the services provided by the company that attracts maximum sales. And if the services are stopped without proper thinking, it would affect the company negatively rather than improve profit margins. Moreover, author says they pay a premium to customer service employees as they posses expert skills, and this is looked down upon rather this can be seen as an asset and could be capitalized upon. Author fails to consider different options available such as, instead of stopping the warranty after two years, they can ask the customers to buy the extended warranty and thus create an entire new path of generating revenue as they already posses the skill set required to give theses services.
In sum, the argument presented is based on too many assumptions and logics with hiatus, and fails to create an impact and convince us. Moreover, it fails to consider different options that could lead to better profit margins. If the suggestions presented before are implied, they could strengthen the argument more.
Every company's one of the ultimate goal is to improve profits. There are different approaches to it, be it increasing sales and hence revenue or by cutting costs or both. The above argument appeared in a memo to executives at a company. According to the argument, company spends too much on free customer service, and should limit the warranty to two years in order to improve profit margins. The current lifetime warranty leads to costs decades into a product's life cycle.Moreover, company pays customer service employees a premium for their expert skills across the entirety of diverse product line, including for products which are no longer sold. The argument presents a good case but with some assumptions and also lacks evidential support, making the argument shaky and unconvincing to the reader. Furthermore, a hiatus between premise and conclusion leaves the reader unacceptable of the conclusion.
Primarily, the author does not present any evidence for the premises he makes. For instance, how much is spent on the customer service after a sale is not entioned but just a comparative adjective is used to highlight it, instead a statistical data would have strengthened the premise. Also the author says to limit warranty to two years to improve profit margins, but fails to provide any strong evidence on which he comes to this period of two years, nor does he mention by what factor the profit margins would improve. All this creates a lacunae in our mind.
Secondarily, argument assumes the products life cycle goes into decades and hence they need to provide service for decades. What is the life span is just 3 or 4 years, the entire argument crumbles. Moreover, argument fails to point out what are the strengths of the company, what if it is the services provided by the company that attracts maximum sales. And if the services are stopped without proper thinking, it would affect the company negatively rather than improve profit margins. Moreover, author says they pay a premium to customer service employees as they posses expert skills, and this is looked down upon rather this can be seen as an asset and could be capitalized upon. Author fails to consider different options available such as, instead of stopping the warranty after two years, they can ask the customers to buy the extended warranty and thus create an entire new path of generating revenue as they already posses the skill set required to give theses services.
In sum, the argument presented is based on too many assumptions and logics with hiatus, and fails to create an impact and convince us. Moreover, it fails to consider different options that could lead to better profit margins. If the suggestions presented before are implied, they could strengthen the argument more.
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