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21 Jan 2018, 02:02
Kudos
Bookmarks
The following appeared in a memorandum from the assistant manager of Pageturner Books:
“Over the past two years, Pageturner’s profits have decreased by 5 percent, even though we have added a popular café as well as a music section selling CDs and tapes. At the same time, we have experienced an increase in the theft of merchandise. We should therefore follow the example of Thoreau Books, which increased its profits after putting copies of its most frequently stolen books on a high shelf behind the payment counter. By doing likewise with copies of the titles that our staff reported stolen last year, we too can increase profitability.” Discuss how well reasoned . . . etc.
The argument cites that Pageturner books, over past two years, has witnessed a reduction in profits even after it added a popular café and music selling section, while experiencing an increase in merchandise theft. To counter this reduction, Pageturner is planning to replicate the practise of Thoreau Books, which increased its profit after re-positioning frequently stolen books at its store. The optimistic conclusion drawn by argument stands on various assumptions & has failed to consider the possible implications of suggested plan.
Firstly, argument assumes that addition of facilities as popular café and music section to a bookstore would result in net positive profits. There could be several reasons for which such an introduction may not be productive to profits. For example, the initial investment in introducing such facilities may not be sufficient to cover up the costs recovered through additional sales of Books, Music station & Café. Such an introduction to bookstore can be counter-productive, as visitors who looked upon the store as calm place to read & buy the books, may now find it noisy due to increased foot-fall and resort to other bookstores. The higher footfall may reduce the surveillance capability and may lead to pilferage, as is also mentioned in the argument. Thus the introduction of additional facilities does not guarantee increased profits, over a period of two years.
Secondly, to counter the issue of stolen merchandise, argument assumes that mere replication of a successful model Thoreau Books, would deter the theft & increase Pageturner’s profits.Before the adoption of this model, the store must consider other factors such as its range of offered titles, staff, additional facilities & average foot-fall.In case the store has poor surveillance system, any relocation would not help to counter the theft of merchandise.The argument fails to consider possible implication that relocating most stolen titles at inaccessible areas such as behind payment counter, would reduce their visibility in store and likely to hamper the sales driving the profits further southwards. So relocation of titles cannot always ensure reduced theft and thus increased profits. The goal could be achieved by increased surveillance.
The increased instances of theft can attribute to reduced profits, if there is sufficient data to show that revenue lost in theft is equivalent to 5 percent of profit. Apart from that there could be several drives for reduced profits such as increased competition, longer payback cycle of Music Store & Café, technological innovations as e-books or overall industry downturn. To evaluate the strength of Pageturner’s plan, the argument also doesn't provide any past data to show that whether any re-location of merchandise has been done to include new facilities, which may have led to increased theft or whether there is increased surveillance pressure due to new facilities.
To conclude, the argument has made several assumption and has ignored key considerations that are integral to success of any business plan. In absence of these details the argument’s premises are not aligned with conclusion.
“Over the past two years, Pageturner’s profits have decreased by 5 percent, even though we have added a popular café as well as a music section selling CDs and tapes. At the same time, we have experienced an increase in the theft of merchandise. We should therefore follow the example of Thoreau Books, which increased its profits after putting copies of its most frequently stolen books on a high shelf behind the payment counter. By doing likewise with copies of the titles that our staff reported stolen last year, we too can increase profitability.” Discuss how well reasoned . . . etc.
The argument cites that Pageturner books, over past two years, has witnessed a reduction in profits even after it added a popular café and music selling section, while experiencing an increase in merchandise theft. To counter this reduction, Pageturner is planning to replicate the practise of Thoreau Books, which increased its profit after re-positioning frequently stolen books at its store. The optimistic conclusion drawn by argument stands on various assumptions & has failed to consider the possible implications of suggested plan.
Firstly, argument assumes that addition of facilities as popular café and music section to a bookstore would result in net positive profits. There could be several reasons for which such an introduction may not be productive to profits. For example, the initial investment in introducing such facilities may not be sufficient to cover up the costs recovered through additional sales of Books, Music station & Café. Such an introduction to bookstore can be counter-productive, as visitors who looked upon the store as calm place to read & buy the books, may now find it noisy due to increased foot-fall and resort to other bookstores. The higher footfall may reduce the surveillance capability and may lead to pilferage, as is also mentioned in the argument. Thus the introduction of additional facilities does not guarantee increased profits, over a period of two years.
Secondly, to counter the issue of stolen merchandise, argument assumes that mere replication of a successful model Thoreau Books, would deter the theft & increase Pageturner’s profits.Before the adoption of this model, the store must consider other factors such as its range of offered titles, staff, additional facilities & average foot-fall.In case the store has poor surveillance system, any relocation would not help to counter the theft of merchandise.The argument fails to consider possible implication that relocating most stolen titles at inaccessible areas such as behind payment counter, would reduce their visibility in store and likely to hamper the sales driving the profits further southwards. So relocation of titles cannot always ensure reduced theft and thus increased profits. The goal could be achieved by increased surveillance.
The increased instances of theft can attribute to reduced profits, if there is sufficient data to show that revenue lost in theft is equivalent to 5 percent of profit. Apart from that there could be several drives for reduced profits such as increased competition, longer payback cycle of Music Store & Café, technological innovations as e-books or overall industry downturn. To evaluate the strength of Pageturner’s plan, the argument also doesn't provide any past data to show that whether any re-location of merchandise has been done to include new facilities, which may have led to increased theft or whether there is increased surveillance pressure due to new facilities.
To conclude, the argument has made several assumption and has ignored key considerations that are integral to success of any business plan. In absence of these details the argument’s premises are not aligned with conclusion.
21 Jan 2018, 18:54
Kudos
Bookmarks
sqube
Hi sqube
Please find below the link which contains almost all the essays related to the GMAT exam (you might find similar essays like the one posted by you as well). These essays will guarantee you a score of 5-6 in the AWA section of the GMAT Exam.
https://gmatclub.com/forum/awa-compilations-109-analysis-of-argument-essays-86274.html
For any further queries please do get back to me. All the best for your exam preparation
27 May 2022, 19:57
Kudos
Bookmarks
Hello from the GMAT Club VerbalBot!
Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).
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Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).
Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
