Please help with essay
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15 Apr 2017, 10:09
The following appeared as part of the business plan of an investment and financial consulting firm:
“Studies suggest that an average coffee drinker’s consumption of coffee increases with age, from age 10 through age 60. Even after age 60, coffee consumption remains high. The average cola drinker’s consumption of cola, however, declines with increasing age. Both of these trends have remained stable for the past 40 years. Given that the number of older adults will significantly increase as the population ages over the next 20 years, it follows that the demand for coffee will increase and the demand for cola will decrease during this period. We should, therefore, consider transferring our investments from Cola Loca to Early Bird Coffee.”
Response:
The argument above concludes that the consulting firm suggests considering transferring investments from Cola Loca to Early Bird Coffee. The agrument states that the number of older adults will significantly increase, but does not consider the number of children that will fall into the studies threshold. The agrument also bases all of the evidence on a 40 year study.
First, the argument states the number of older adults will increase significantly as the population ages in the next 20 years. Although this is true, the argument does not take into consideration the number of young children that will reach at least 10 years of age. There is no evidence of whether the number of children will increase faster or slower than the older adult population. If every adult couple has more than 2 children within the next 2 years, there will be more young children than older adults. If there are more young children, more cola will be sold instead of coffee. Therefore, investing in Cola Loca is the better financial decision.
Second, the study that is referenced in the argument has found the trend of people drinking more coffee and less cola with age, has only remained stable for 40 years. This study has not found a stable trend for the entire duration of the age range of 10 years old to 60 years old. The trend has a potential of changing with the aging of a new generation. Older adults typically enjoy the social aspect of going to get a coffee. Coffee is an appropriate drink for business meetings. This trend may not remain stable for the next generation. If this trend changes, it may change an aging persons drink of choice.
Finally, it is possible that the younger generation enjoys Cola Loca more than Early Bird Coffee for reasons other than the cola selection. If the food is better quality or cheaper to buy at Cola Loca, it is possible that Cola Loca will be more profitable than Early Bird Coffee. If Cola Loca serves full meals, this may be a huge advantage if a customer wants food and a drink. Serving food may provide the company with more profit instead of more customers. As there is no information about other menu options or the profitability of either company, it is impossible to conclude whether Cola Loca or Early Bird Coffee would be a better investment.
The argument does not provide enough evidence to conclude whether the company should consider tranferring their investment from Cola Loca to Early Bird Coffee. There is no evidence of how either business is performing or the profitability. Without other information on the companies, it is impossible to conclude which business should be given the investments.
The argument in its current state is flawed. Without more information on how Cola Loca or Early Bird Coffee is performing financially, it is impossible to conclude which business should have the investment. Although the trend of drinking more coffee and less cola increases with age, the argument does not consider the increase in the number of children in comparision to the number of aging adults. The argument does not provide enough evidence to make a good business decision.