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Manager
Joined: 26 Jun 2011
Posts: 247

Kudos [?]: 78 [0], given: 26

Location: India
GMAT 1: 760 Q51 V41

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15 Feb 2012, 13:37
I know the writing has some glaring shortcomings, as it was taken in real time. And they ought to be there on the real day too.

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.

The argument claims that the free customer service by an industrial equipment manufacturer after a sale has been made is hurting the profit margins, and hence the current lifetime warranty should be made limited to two years. Also, the customer service employees have to be paid higher because of their expert skills. Though the argument may have some merit, on a closer look we find that the reasoning is flawed for several reasons.
Firstly, it is stated that terminating free customer service would improve profits. The argument readily assumes that the sales of the product would not decline even after the termination of a service very lucrative for the customers. It is critical to evaluate that what proportion of the customers are attracted to the company's products because of the current free customer service and lifetime warranty. The argument fails to take into account the detrimental effect of doing so on the sales of the product and eventually a huge decline in company's profits. Secondly, the argument provides no evidence of how much of the company's revenue is being spent on customer services. It only describes it "too much" which can be termed vague at best. It is far more logical to represent the costs as a percentage of revenue than in absolute terms.
Thirdly, the suggests to limit the warranty period to two years. No evidence is provided to support how the time span of two years has been reached. The argument could be far more convincing if some data is provided to analyze a sample size of industrial equipment to know when the problems begin to occur after the sale has been made. Only then, a suitable warranty time can be decided as a substitute to lifetime warranty.
Furthermore, the argument states that the customer service employees have to be paid a premium because they possess expert skills across a very diverse product line. These employees are crucially important to the company. The argument has failed to consider the scenario in which customer complaints are unresolved in absence of such employees with expertise. The argument suggests no substitute for such employees. It could prove very harmful to the company's reputation if customer complaints go unresolved.
In summary, the argument is based on unsubstantiated premises and unproven assumptions. To evaluate an argument, it is important to evaluate the contribution of all factors which can affect the conclusion. The argument fails to consider the effect of several key factors such as positive customer response to free customer service, a suitable substitute to lifetime warranty, if any, and an alternative to higher paid customer service employees. Though the argument may have some merit, unless the argument succeeds in explicating these factors, it represents more of a wishful thinking than logical reasoning.

AWA ESSAYS: Analyze Issues
ESSAY QUESTION:
"Individuals living in capitalist economies suffer a higher degree of personal risk than in other types of economies. Creating regulations that protect a society can’t help but interfere with free market forces, a basic tenet of capitalism."

From your perspective, how accurate is the above statement? Support your position with reasons and/or examples from your own experience, observations, or reading.

The issue claims that the individuals living in capitalist economies suffer a higher degree of personal risk than in other types of economies and any regulations to protect a society interfere with free market forces which is the basic tenet of capitalism. Though the issue is a rather contentious one and arguments can be made in both favor and against, I believe that the issue rightly suggests the higher degree of personal risk in capitalist economies.
Firstly, as stated, the fundamental principle of working of capitalism is unregulated free market forces. The capitalist economies do not bother about the states of their individuals. The state of the markets is the only force which decides the state of the individuals in capitalist economies. A sudden market crash in a capitalist economy can perish many individuals in its wake. At the same time, a sudden market gain can turn a few individuals into millionaires. But the fact remains that the individuals are on their own risk in the functioning of a capitalist economy. Any regulations put on such free flowing capitalist economy, and it no more remains one as the basic tenet of unregulated markets is hurt. The government and the markets act as parallel forces which do not intervene in the functioning of one another.
On the other hand, other economies share the risk of their individuals to a certain extent, thereby reducing the degree of personal risk in those economies as compared to that in a capitalist economy. For example, a socialist economy works on the fundamental principle of social equality. No individual can be rich; no individual can be poor in a socialist economy. Everything including land and money is owned by the state. In socialist USSR, lands owned by the oligarchical czars were confiscated by the state. In such an economy, among everything, the risk is also owned by the state. Rich and poor are constantly brought at the same level in such economies, thereby negating any instance of personal risk.
Whereas in capitalist economies, the only force that works unrestricted is the force of demand and supply. During the industrial revolution in America, the rich got richer and the poor poorer. The agenda of a capitalist economy working through the forces of demand and supply is development. Every individual is at his own risk in such an economy and no government intervention is possible to work for the social equality.
In summary, the issue's claim that the individuals living in capitalist economies suffer a higher degree of personal risk than in other economies is true and logical on various grounds. Free market forces, the fundamental forces working in a capitalist economy, do not bother about the state of any particular individuals and therefore enhance the degree of personal risk. As far as other such economies as a socialist economy are concerned, they vouch for social equality first and thus reduce the risk suffered by an individual.
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Kudos [?]: 78 [0], given: 26

Intern
Joined: 15 Nov 2011
Posts: 32

Kudos [?]: 6 [0], given: 8

Location: United States

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21 Feb 2012, 12:41
Essay 1: I like how informed the essay is. The only issue I have is it has too much information in it. The emphasis should be on a few assumptions and critiquing each assumption. Paragraphs 1 and 2 have many factors that affect the bad reasoning behind this campaign. In short there are many assumptions made on the assumptions of the campaign slogan.

Kudos [?]: 6 [0], given: 8

Manager
Joined: 26 Jun 2011
Posts: 247

Kudos [?]: 78 [0], given: 26

Location: India
GMAT 1: 760 Q51 V41

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22 Feb 2012, 09:27
bobbynakka wrote:
Essay 1: I like how informed the essay is. The only issue I have is it has too much information in it. The emphasis should be on a few assumptions and critiquing each assumption. Paragraphs 1 and 2 have many factors that affect the bad reasoning behind this campaign. In short there are many assumptions made on the assumptions of the campaign slogan.

Thank you Bobby for the analysis. Could you rate it on a scale of 6, i.e. if you have an experience of how it works on the real GMAT.
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Kudos [?]: 78 [0], given: 26

Current Student
Joined: 12 Sep 2011
Posts: 900

Kudos [?]: 957 [0], given: 114

Concentration: Finance, Finance
GMAT 1: 710 Q48 V40

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22 Feb 2012, 12:22
With a 5.5 landing you in the 76% on todays test, I would assume that you'd be a 5+ on both essays. It is obvious that you have pretty good english, grammar, spelling, quick typing, and logical reasoning. I wouldn't spend to much time worrying about the AWA. I would definitely practice what you are already doing anytime you take a practice test, especially since this will help you with stamina (probably more important for you at this point). Good luck!

Anything above a 4.0 is considered good enough, and anything above 5 is considered solid. You should not have any trouble hitting a 5+ with similar essays.
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Kudos [?]: 957 [0], given: 114

Manager
Joined: 26 Jun 2011
Posts: 247

Kudos [?]: 78 [0], given: 26

Location: India
GMAT 1: 760 Q51 V41

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22 Feb 2012, 14:36
I assume that you read atleast each essay half before coming to analysis. Thankyou for the patience.

I hope it gives me a 5+, as there is not a single evaluation of AWA available to judge the essays.

P.S> I am far from being a native, never been to US of A, you see.
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Kudos [?]: 78 [0], given: 26

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