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freekyguy007
Joined: 18 Aug 2016
Last visit: 27 Mar 2018
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Concentration: Finance, Entrepreneurship
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18 Aug 2016, 07:54
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I have used the template released by chineseburned with a little tweaking.
Here is the question -
'Since our company started manufacturing and marketing a deluxe light bulb six months ago, sales of our economy light bulb-and company profits-have decreased significantly. Although the deluxe light bulb sells for 50 percent more than the economy bulb, it lasts twice as long. Therefore, to increase repeat sales and maximize profits, we should discontinue the deluxe light bulb.
Discuss how well reasoned….'
Here is the answer (415 words, written in 25 minutes) -
The argument claims that due to the introduction of the deluxe light bulb 6 months ago, the sales of the economy light bulb have fallen. Stated in this way the argument manipulates facts and conveys a distorted view of the argument. The conclusion of the argument lies in assumptions that have no solid foundation. Hence the argument is unconvincing and has several flaws in it.
Firstly, the argument readily assumes that the low sales of the economy light bulb are caused by the introduction of the deluxe light bulb. This single statement is a stretch as it does not take into account other factors that could affect the sales, of the economy light bulb, such as entry of new competitors, change in marketing strategy or drop in the quality of the product. Clearly the argument gives a narrow vision of the causes of decline in sales. This argument could have been much clearer if the argument gave a brief background of the various reasons of drop in sales.
Secondly, the argument assumes that the economy bulb drives the company sales & profit more than the deluxe bulb and that the company should discontinue the deluxe bulb to maximize sales and consequently profits. This again is a very weak claim as the argument assumes that the customers lost from the discontinuation of the deluxe bulb would easily return to buy the economy bulb. While the deluxe bulb is 1.5 times expensive than the economy bulb, it lasts twice as longer. So the argument assumes that the customers would buy 2 enough economy bulbs to cover up the sales and profits lost from the discontinuation of the deluxe bulb. Clearly this is a risky strategy for the company. If the argument would have given a concrete strategy to tackle the above mentioned problem then the argument would have been much more convincing.
Finally, the argument does not take into account the scenario that how the customers would handle such aggressive introduction and withdrawal of a product from the market. Furthermore, the argument provides no strategy in case the customers decide not to buy the economy bulb altogether and move to a new supplier of bulbs. Without convincing answers to these questions one is left with the impression that the claim is more of wishful thinking rather than substantial evidence.
In conclusion, the argument is flawed for the above mention reasons and is therefore unconvincing. It would be considerably strengthened if the argument clearly mentioned all the facts.
Thank you in advance.
PS - Just shifted forums, from analystfroum to gmatclub
Here is the question -
'Since our company started manufacturing and marketing a deluxe light bulb six months ago, sales of our economy light bulb-and company profits-have decreased significantly. Although the deluxe light bulb sells for 50 percent more than the economy bulb, it lasts twice as long. Therefore, to increase repeat sales and maximize profits, we should discontinue the deluxe light bulb.
Discuss how well reasoned….'
Here is the answer (415 words, written in 25 minutes) -
The argument claims that due to the introduction of the deluxe light bulb 6 months ago, the sales of the economy light bulb have fallen. Stated in this way the argument manipulates facts and conveys a distorted view of the argument. The conclusion of the argument lies in assumptions that have no solid foundation. Hence the argument is unconvincing and has several flaws in it.
Firstly, the argument readily assumes that the low sales of the economy light bulb are caused by the introduction of the deluxe light bulb. This single statement is a stretch as it does not take into account other factors that could affect the sales, of the economy light bulb, such as entry of new competitors, change in marketing strategy or drop in the quality of the product. Clearly the argument gives a narrow vision of the causes of decline in sales. This argument could have been much clearer if the argument gave a brief background of the various reasons of drop in sales.
Secondly, the argument assumes that the economy bulb drives the company sales & profit more than the deluxe bulb and that the company should discontinue the deluxe bulb to maximize sales and consequently profits. This again is a very weak claim as the argument assumes that the customers lost from the discontinuation of the deluxe bulb would easily return to buy the economy bulb. While the deluxe bulb is 1.5 times expensive than the economy bulb, it lasts twice as longer. So the argument assumes that the customers would buy 2 enough economy bulbs to cover up the sales and profits lost from the discontinuation of the deluxe bulb. Clearly this is a risky strategy for the company. If the argument would have given a concrete strategy to tackle the above mentioned problem then the argument would have been much more convincing.
Finally, the argument does not take into account the scenario that how the customers would handle such aggressive introduction and withdrawal of a product from the market. Furthermore, the argument provides no strategy in case the customers decide not to buy the economy bulb altogether and move to a new supplier of bulbs. Without convincing answers to these questions one is left with the impression that the claim is more of wishful thinking rather than substantial evidence.
In conclusion, the argument is flawed for the above mention reasons and is therefore unconvincing. It would be considerably strengthened if the argument clearly mentioned all the facts.
Thank you in advance.
PS - Just shifted forums, from analystfroum to gmatclub
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