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There is relatively little room for growth in the overall carpet

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There is relatively little room for growth in the overall carpet  [#permalink]

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New post 23 Apr 2015, 05:30
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A
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C
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62% (01:52) correct 38% (01:56) wrong based on 453 sessions

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There is relatively little room for growth in the overall carpet market, which is tied to the size of the population. Most who purchase carpet do so only once or twice, first in their twenties or thirties, and then perhaps again in their fifties or sixties. Thus as the population ages, companies producing carpet will be able to gain market share in the carpet market only through purchasing competitors, and not through more aggressive marketing.

Which one of the following, if true, casts the most doubt on the conclusion above?

A. Two of the three mergers in the industry’s last ten years led to a decline in profits and revenues for the newly merged companies.

B. Most of the major carpet producers market other floor coverings as well.

C. Most established carpet producers market several different brand names and varieties, and there is no remaining niche in the market for new brands to fill.

D. Price reductions, achieved by cost-cutting in production, by some of the dominant firms in the carpet market are causing other producers to leave the market altogether.

E. The carpet market is unlike most markets in that consumers are becoming increasingly resistant to new patterns and styles.

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Re: There is relatively little room for growth in the overall carpet  [#permalink]

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New post 23 Apr 2015, 09:20
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IMO D.

D provides an alternate way for companies to gain market share and hence casts doubt on the argument's conclusion.
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Re: There is relatively little room for growth in the overall carpet  [#permalink]

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New post 23 Apr 2015, 10:30
HI Souvik,

IMO, C or A.

The conclusion is ... Carpets producting companies can only get a market share when they merge. Agressive marketing does ont yield profits.

To break the conclusion, the aim will be either to say, ' Simple marketing can reap lots of profits' Or 'Mergers will not be useful'

My thought process.

B: Out of scope

D: Does not break the conclusion.

E: Customer choice is out of scope.


A: 2 of the 3 mergers have failed: Mergers have failed. We cannot standardise somethng that happend for 3 companies to the whole industry.

C: Most established carpet producers sell various brands but there is no niche; Hence there will not be any use in merging with other companies.


Please let me know whether this is correct.



souvik101990 wrote:
There is relatively little room for growth in the overall carpet market, which is tied to the size of the population. Most who purchase carpet do so only once or twice, first in their twenties or thirties, and then perhaps again in their fifties or sixties. Thus as the population ages, companies producing carpet will be able to gain market share in the carpet market only through purchasing competitors, and not through more aggressive marketing.

Which one of the following, if true, casts the most doubt on the conclusion above?

A. Two of the three mergers in the industry’s last ten years led to a decline in profits and revenues for the newly merged companies.

B. Most of the major carpet producers market other floor coverings as well.

C. Most established carpet producers market several different brand names and varieties, and there is no remaining niche in the market for new brands to fill.

D. Price reductions, achieved by cost-cutting in production, by some of the dominant firms in the carpet market are causing other producers to leave the market altogether.

E. The carpet market is unlike most markets in that consumers are becoming increasingly resistant to new patterns and styles.

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Re: There is relatively little room for growth in the overall carpet  [#permalink]

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New post 16 Jun 2015, 08:52
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shriramvelamuri wrote:
HI Souvik,

IMO, C or A.

The conclusion is ... Carpets producting companies can only get a market share when they merge. Agressive marketing does ont yield profits.

To break the conclusion, the aim will be either to say, ' Simple marketing can reap lots of profits' Or 'Mergers will not be useful'

My thought process.

B: Out of scope

D: Does not break the conclusion.

E: Customer choice is out of scope.


A: 2 of the 3 mergers have failed: Mergers have failed. We cannot standardise somethng that happend for 3 companies to the whole industry.

C: Most established carpet producers sell various brands but there is no niche; Hence there will not be any use in merging with other companies.


Please let me know whether this is correct.



souvik101990 wrote:
There is relatively little room for growth in the overall carpet market, which is tied to the size of the population. Most who purchase carpet do so only once or twice, first in their twenties or thirties, and then perhaps again in their fifties or sixties. Thus as the population ages, companies producing carpet will be able to gain market share in the carpet market only through purchasing competitors, and not through more aggressive marketing.

Which one of the following, if true, casts the most doubt on the conclusion above?

A. Two of the three mergers in the industry’s last ten years led to a decline in profits and revenues for the newly merged companies.

B. Most of the major carpet producers market other floor coverings as well.

C. Most established carpet producers market several different brand names and varieties, and there is no remaining niche in the market for new brands to fill.

D. Price reductions, achieved by cost-cutting in production, by some of the dominant firms in the carpet market are causing other producers to leave the market altogether.

E. The carpet market is unlike most markets in that consumers are becoming increasingly resistant to new patterns and styles.



Hi shriramvelamuri,
A states something that happened 10 years back. Does this warrant the fact that it might recur?? I dont think so, hence, A is ruled out.
As for C, most established carpet producers market under several brands. This does not affect the conclusion. To weaken the conclusion we need to say that "Carpet producing companies can gain a market share NOT through merging, BUT through aggressive marketing."
Option D does exactly that; When other producers are forced to leave the market, there's no room for a merger and dominant firms are reducing prices substantially, which is aggressive marketing. Hence, D. Hope that was helpful. :)
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Re: There is relatively little room for growth in the overall carpet  [#permalink]

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New post 25 Nov 2017, 10:28
There is relatively little room for growth in the overall carpet market, which is tied to the size of the population. Most who purchase carpet do so only once or twice, first in their twenties or thirties, and then perhaps again in their fifties or sixties. Thus as the population ages, companies producing carpet will be able to gain market share in the carpet market only through purchasing competitors, and not through more aggressive marketing.

Which one of the following, if true, casts the most doubt on the conclusion above?

A. Two of the three mergers in the industry’s last ten years led to a decline in profits and revenues for the newly merged companies. -we are not worried about the profits

B. Most of the major carpet producers market other floor coverings as well. -the argument is only about carpet market

C. Most established carpet producers market several different brand names and varieties, and there is no remaining niche in the market for new brands to fill. -this doesn't explain the market share of the market players.

D. Price reductions, achieved by cost-cutting in production, by some of the dominant firms in the carpet market are causing other producers to leave the market altogether. -Correct. So there is another reason (cost cutting) that might help in improving the market share of a company.

E. The carpet market is unlike most markets in that consumers are becoming increasingly resistant to new patterns and styles. -out of scope
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Re: There is relatively little room for growth in the overall carpet  [#permalink]

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Re: There is relatively little room for growth in the overall carpet &nbs [#permalink] 27 Dec 2018, 19:29
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