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CLTpkg
Joined: 02 Jan 2017
Last visit: 13 May 2020
Posts: 18
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Location: United States
Schools: Darden '22 (A)
GMAT 1: 680 Q45 V38
GPA: 3.45
30 May 2017, 14:08
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I wrote the below response on a recent MGMAT Practice test. Any evaluation and or feedback would be greatly appreciated!
AWA ESSAYS: Analyze Argument
ESSAY QUESTION:
The following appeared in a memo to executives at a company that manufactures industrial equipment:
"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."
Discuss how well reasoned you find this argument. Point out flaws in the argument's logic and analyze the argument's underlying assumptions. In addition, evaluate how supporting evidence is used and what evidence might counter the argument's conclusion. You may also discuss what additional evidence could be used to strengthen the argument or what changes would make the argument more logically sound.
YOUR RESPONSE:
This memo to company executives is poorly reasoned in a number of ways. It relies on vague information to draw a sweeping conclusion regarding the desire to scale back the terms of the companies warranty.
The memo begins with an abstract term to describe how much is being spend on free customer service after a sale has been made. Using the phrase "too much" provides no insight into how much is actually being spent on this customer service. A dollar figure or a percentage of profits would be helpful to shed more light on how this cost is impacting the business.
The memo continues, however, to make a recommendation that due to this high cost the warranty on products should be limited to 2 years. It is then claimed that this would improve profit margins for the company. This bold statement is not supported by any other data other than the fact that the company is spending "too much" on free customer service. A litany of other variables that impact company profit have been ignored. It could be quite possible that reducing the warranty would turn customers away and lower revenue. This could impact profits significantly. Other data showing why it is the warranty that should be dialed back and not other parts of the business would be highly useful information. A responsible decision about scaling back the warranty cannot be made without taking a more holistic approach to the business.
Additionally, the memo does not provide reasoning as to why the lifetime warranty should be cut back to 2 years instead of some other time period. Moving from a lifetime warranty to a 2 year warranty is serious change. Why not 5 years or 7 years? It does not appear that any other options were taken into consideration. Research that shows the relationship between customer loyalty and warranty terms would be quite helpful in understanding how this change would affect the customer base of the company and therefore revenue.
Also mentioned in the memo is the fact that customer service employees are paid a premium due to the breadth of knowledge that is required about the products. It is blindly assumed that if the warranty time was reduced then the customer service reps could be less knowledgable and therefore could be paid less. This is a dangerous conclusion to draw. The customer service employees may need to be just as knowledgeable about their products just in case some calls about an old product that they have. While this product may not be under warranty, it will make a poor impression on the customer if the customer service employees knows nothing about the product. This article also creates the assumption that there will be no consequences if the customer service employees are paid less. The lower pay could lead to dissatisfaction in the department and a lower quality of customer service. This could cause a drop in revenue due to customers being displeased and not returning for multiple purchases.
Overall, this article relies on a very weak base of vague data to support a bold recommendation to company executives. The lack of quantitative data to support this conclusion yields an argument that has little merit and should not be used to make a responsible decision about the terms of the companies warranty.
AWA ESSAYS: Analyze Argument
ESSAY QUESTION:
The following appeared in a memo to executives at a company that manufactures industrial equipment:
"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."
Discuss how well reasoned you find this argument. Point out flaws in the argument's logic and analyze the argument's underlying assumptions. In addition, evaluate how supporting evidence is used and what evidence might counter the argument's conclusion. You may also discuss what additional evidence could be used to strengthen the argument or what changes would make the argument more logically sound.
YOUR RESPONSE:
This memo to company executives is poorly reasoned in a number of ways. It relies on vague information to draw a sweeping conclusion regarding the desire to scale back the terms of the companies warranty.
The memo begins with an abstract term to describe how much is being spend on free customer service after a sale has been made. Using the phrase "too much" provides no insight into how much is actually being spent on this customer service. A dollar figure or a percentage of profits would be helpful to shed more light on how this cost is impacting the business.
The memo continues, however, to make a recommendation that due to this high cost the warranty on products should be limited to 2 years. It is then claimed that this would improve profit margins for the company. This bold statement is not supported by any other data other than the fact that the company is spending "too much" on free customer service. A litany of other variables that impact company profit have been ignored. It could be quite possible that reducing the warranty would turn customers away and lower revenue. This could impact profits significantly. Other data showing why it is the warranty that should be dialed back and not other parts of the business would be highly useful information. A responsible decision about scaling back the warranty cannot be made without taking a more holistic approach to the business.
Additionally, the memo does not provide reasoning as to why the lifetime warranty should be cut back to 2 years instead of some other time period. Moving from a lifetime warranty to a 2 year warranty is serious change. Why not 5 years or 7 years? It does not appear that any other options were taken into consideration. Research that shows the relationship between customer loyalty and warranty terms would be quite helpful in understanding how this change would affect the customer base of the company and therefore revenue.
Also mentioned in the memo is the fact that customer service employees are paid a premium due to the breadth of knowledge that is required about the products. It is blindly assumed that if the warranty time was reduced then the customer service reps could be less knowledgable and therefore could be paid less. This is a dangerous conclusion to draw. The customer service employees may need to be just as knowledgeable about their products just in case some calls about an old product that they have. While this product may not be under warranty, it will make a poor impression on the customer if the customer service employees knows nothing about the product. This article also creates the assumption that there will be no consequences if the customer service employees are paid less. The lower pay could lead to dissatisfaction in the department and a lower quality of customer service. This could cause a drop in revenue due to customers being displeased and not returning for multiple purchases.
Overall, this article relies on a very weak base of vague data to support a bold recommendation to company executives. The lack of quantitative data to support this conclusion yields an argument that has little merit and should not be used to make a responsible decision about the terms of the companies warranty.
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