This past year, we spent almost as much on advertising as did our main

Question

The following appeared in a memorandum from the vice president of Road Food, an international chain of fast-food
restaurants:
“This past year, we spent almost as much on advertising as did our main competitor, Street Eats, which has fewer
restaurants than we do. Although it appeared at first that our advertising agency had created a campaign along the
lines we suggested, in fact our total profits were lower than those of Street Eats. In order to motivate our advertising
agency to perform better, we should start basing the amount that we pay it on how much total profit we make each
year.”
Discuss how well reasoned . . . etc.
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The vice president of Road Food restaurants states that because they have spent more on advertising than has their competitor, and yet earned less profits, Road Food should start paying the advertisement agency on the basis of profit earned per year. The vice president implies that since they have more number of restaurants than their competitor, they should earn more profit. This conclusion lacks key factors and is based on weak assumptions.

Firstly, the memorandum does not specify the international markets covered by both the restaurant chains. The memorandum does not specify the cuisines preferred by the people living around the Road Food restaurant branches, in those international markets. Road Food can concentrate on preparing the dishes as per the likes of their customers. This is what their competitor Street Eats must be doing, thus driving up their profits. Mc Donalds, an international fast food chain, has a different product for each of their markets. The burger sold in America is a lot different than the burger sold in India. Although Mc Donalds is an American brand, when they opened their franchise in India, the taste of all the food products sold was modified according to the taste preferences of Indian people. This is what helped Mc Donalds become popular and earn profits in India. This policy may have been applied by the Street Eats and thus must have beaten Road Foods in earning yearly profits. Blaming on the advertisement agency is not the solution.

Second, the memo does not specify the number of restaurant and the total revenues and expenses generated by both the chain of restaurants. Road Food has higher number of restaurants and hence their inventory and other tangible assets might be driving up the total expense. Memo does not specify whether all of the branches of Road Food are in profit. Instead of discontinuing or improving the standards of the non performing branches, the vice president blames the advertisement agency.

Finally, the memorandum states the results of only one year. It may happen that the following year, the profits of Road Food surged. In this case as the profits increased, Road Food will have to pay extra to the advertisement agency, decreasing the restaurant's profits. This is a very poor financial decision made by the vice president of an international restaurant chain. Such decision has to be made by a committee and based on solid evidence that the advertisement agency is really not performing it's best. Small decisions can make a big impact in a large company like Road Food.

In conclusion, the opinion stated by the vice president is a stretch and has logical flaws. The situation needs to be analyzed in further detail. If all the above factors are considered, then the exact reason for depleting profits of Road Food can be determined.

paulaalv11 · Answer

Hi Rohan,

Congrats on a good essay. Well structured, good punctuation, grammar, and vocabulary. I just found a couple of minor issues, which I marked in red. I believe that, having these minor issues resolved, your essay should be close to a 5.0, at least.

Hope this helps!

Cheers!!

Cheers!

bb · Answer

Using the unofficial AWA grader GMATAWA, here is what I have: AWA Score: 5 out of 6! Coherence and connectivity: 5/5 This rating corresponds to the flow of idea and expression from one paragraph to another. The effective use of connectives and coherence of assertive language in arguing for/against the argument is analyzed. This is deemed as one of the most important parameters. Paragraph structure and formation: 3.5/5 The structure and division of the attempt into appropriate paragraphs is evaluated. To score well on this parameter, it is important to organize the attempt into paragraphs. Preferable to follow the convention of leaving a line blank at the end of each paragraph, to make the software aware of the structure of the essay. Vocabulary and word expression: 4/5 This parameter rates the submitted essay on the range of relevant vocabulary possessed by the candidate basis the word and expression usage. There are no extra- points for bombastic word-usage. Simple is the best form of suave!

Please do not forget to use the Chineseburnt AWA Template! https://gmatclub.com/forum/how-to-get-6 ... 64327.html

pkbiet · Answer

The following appeared in a memorandum from the vice president of Road Food, an international chain of fast-food
restaurants:
“This past year, we spent almost as much on advertising as did our main competitor, Street Eats, which has fewer
restaurants than we do. Although it appeared at first that our advertising agency had created a campaign along the
lines we suggested, in fact our total profits were lower than those of Street Eats. In order to motivate our advertising
agency to perform better, we should start basing the amount that we pay it on how much total profit we make each
year.”
Discuss how well reasoned . . . etc.
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The argument claims that linking monetary benefits based on the profits to the advertising agency would help the food chain outperform Street Eats. Stated in such a way the argument is inconclusive of the data supporting the hypothesis, tends to manipulate facts to present a distorted view of reality and is a leap of faith reasoning without clear outcomes. In sum, the argument could have been presented in a much improvised way with more relevant and supporting fact sheet on which the assumption depends.

Firstly the argument states that we spent equivalently to our competitor Street Eats over the advertisement which has a fewer outlets in city as compared to ours. The hypothesis is a paradoxical situation in which the author claims that even though Street Eats has fewer outlets and spends same as us, they still manage better profits than ours outlets and the causative analysis still unknown while reasoning is that the ad company helps make them better profit making. This cause and effect could have been justified if presented with examples such as revenue, profit sheets, balance sheets or the ad expense cash ratio on which the profits were aligned. So solely relying on a single parameter that too not corroborative is a wrong thought process.

Secondly the argument claims that profit margins as compared to Street Eats could have been lessened if the payment of the advertising agency would be linked with profits. This data is again unreliable and not authentic as it fails to address the key strategies to achieve the result. The losses or lessened profits could much be attributed to lower staff, less trained staffs, less inventory, less menu items, low number of dishes or the outlets in those area where the footfalls are less. Unless these datas are worked upon and author fails to recognise the same, it would be more of a wishful thought process than to face the reality and is a vague to author’s claim.

Finally the argument should answer to questions such as: Why not other factors have been taken under considerations? What should be efforts undertaken apart from profit linking strategy of the restaurant as compared to its peers Street Eats? How will the ad agency be used in a different way to improve profitability? Without convincing answers and without cognitive approach, the whole idea to turn around profitability of restaurant is more of a wishful thought process instead of being conducive.

In conclusion the argument is flawed for above mentioned reasons and is therefore unconvincing. It would be much stronger if the author would have explicitly stated the cause and effect analysis by taking other factors under consideration. In order to access the merits of the decision, it would be essential to have full knowledge of the contributing factors, without which the argument remains open to debate.

Please review my approach

bb · Answer

Using the unofficial AWA grader GMATAWA, here is what I have: AWA Score: 5.5 out of 6! Coherence and connectivity: 4.5/5 This rating corresponds to the flow of idea and expression from one paragraph to another. The effective use of connectives and coherence of assertive language in arguing for/against the argument is analysed. This is deemed as one of the most important parameters. Paragraph structure and formation: 5/5 The structure and division of the attempt into appropriate paragraphs is evaluated. To score well on this parameter, it is important to organize the attempt into paragraphs. Preferable to follow the convention of leaving a line blank at the end of each paragraph, to make the software aware of the structure of the essay. Vocabulary and word expression: 5/5 This parameter rates the submitted essay on the range of relevant vocaubulary possessed by the candidate basis the word and expression usage. There are no extra- points for bombastic word-usage. Simple is the best form of suave!

Please do not forget to use the Chineseburnt AWA Template! https://gmatclub.com/forum/how-to-get-6 ... 64327.html

pkbiet · Answer

Q: This past year, we spent almost as much on advertising as did our main competitor, Street Eats, which has fewer restaurants than we do. Although it appeared at first that our advertising agency had created a campaign along the lines we suggested, in fact our total profits were lower than those of Street Eats. In order to motivate our advertising agency to perform better, we should start basing the amount that we pay it on how much total profit we make each year.

Essay Format

The argument claims that linking monetary benefits based on the profits to the advertising agency would help the food chain outperform Street Eats. Stated in such a way the argument is inconclusive of the data supporting the hypothesis, tends to manipulate facts to present a distorted view of reality and is a leap of faith reasoning without clear outcomes. In sum, the argument could have been presented in a much improvised way with more relevant and supporting fact sheet on which the assumption depends.

Firstly the argument states that we spent equivalently to our competitor Street Eats over the advertisement which has a fewer outlets in city as compared to ours. The hypothesis is a paradoxical situation in which the author claims that even though Street Eats has fewer outlets and spends same as us, they still manage better profits than ours outlets and the causative analysis still unknown while reasoning is that the ad company helps make them better profit making. This cause and effect could have been justified if presented with examples such as revenue, profit sheets, balance sheets or the ad expense cash ratio on which the profits were aligned. So solely relying on a single parameter that too not corroborative is a wrong thought process.

Secondly the argument claims that profit margins as compared to Street Eats could have been lessened if the payment of the advertising agency would be linked with profits. This data is again unreliable and not authentic as it fails to address the key strategies to achieve the result. The losses or lessened profits could much be attributed to lower staff, less trained staffs, less inventory, less menu items, low number of dishes or the outlets in those area where the footfalls are less. Unless these datas are worked upon and author fails to recognise the same, it would be more of a wishful thought process than to face the reality and is a vague to author’s claim.

Finally the argument should answer to questions such as: Why not other factors have been taken under considerations? What should be efforts undertaken apart from profit linking strategy of the restaurant as compared to its peers Street Eats? How will the ad agency be used in a different way to improve profitability? Without convincing answers and without cognitive approach, the whole idea to turn around profitability of restaurant is more of a wishful thought process instead of being conducive.

In conclusion the argument is flawed for above mentioned reasons and is therefore unconvincing. It would be much stronger if the author would have explicitly stated the cause and effect analysis by taking other factors under consideration. In order to access the merits of the decision, it would be essential to have full knowledge of the contributing factors, without which the argument remains open to debate.

bb · Answer

THIS ESSAY HAS ALREADY BEEN EVALUATED! LOOK ABOVE. DO NOT DOUBLEPOST!

This past year, we spent almost as much on advertising as did our main

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