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25 Jan 2022, 20:46
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The following appeared as a memorandum from the vice-president of the Dolci candy company: “Given the success of our premium and most expensive line of chocolate candies in a recent taste test and the consequent increase in sales, we should shift our business focus to producing additional lines of premium candy rather than our lower-priced, ordinary candies. When the current economic boom ends and consumers can no longer buy major luxury items, such as cars, they will still want to indulge in small luxuries, such as expensive candies.”
The following memorandum is flawed for numerous reasons. The argument is based on a random taste test and an increase in sales of luxury candy to produce only luxury candys even after an economic boom. The vice president is relying on a taste test which could have very skewed results in favor of the luxury candy. The sales increase on the luxury cand could have been very marginal while middle market candies outperformed luxury candies. Finally after an economic boom usually comes an economic downturn that could cause a recession and people to not buy luxury candies.
First, the argument focuses on a taste test as a reason to favor only producing the premium candy. A taste is usually a sampling of a small number of people and could have very skewed results. Depending on economics and area people have different taste preferences that could skew the results. Products may also fare well in a taste test but not so much in everyday consumption. The Dolci candy company could have been receiving favorable reviews of its average candy as well in tastes. If the taste test had been conducted nationwide and accounted for other factors, such as cost, it would be a much more accurate representation of consumer interest.
Second, the vice president mentions an increase in sales of the premium candy line. While an increase may have occurred, it could have been a very marginal increase that wouldn’t provide justification for only producing premium candies. Dolci may have seen an increase in sales as well for its normal candy lines that could have been potentially better at producing profit for the company. By only producing premium candies Dolci would be cannibalizing profits from ordinary candies. If the company had experienced a drastic increase in profit from the premium candies and the majority of company profit’s came from that line a focus on premium candies could be warranted. It would still be best to sell ordinary candies as well to maximize profits.
Third, the company wants to continue selling only premium candies even after the economic boom ends. It does not make economic sense to only sell high priced goods during a time of potential economic downturn. The economy could be potentially facing a time of recession. During a recession consumers tend to become more price conscious and would prefer to buy a cheaper brand to satisfy their sweet tooth. Premium priced items would not see as much sales during an economic downturn leading to lower profits for Dolci. The company could continue to make ordinary candies that would be recession proof and help keep cash flow for the company
Because the memorandum makes several unwarranted assumptions it fails to justify its case for only selling premium candies. The company needs to account for the small sample size of a taste test. While sales of the premium line may have increased other categories of the company may have seen growth as well. Finally, the company plans to sell only premium/ high priced candies during a time of potential economic downturn. The company should look into continuing to keep a diverse portfolio to keep itself better positioned in the market and poised for profits during various economic cycles.
The following memorandum is flawed for numerous reasons. The argument is based on a random taste test and an increase in sales of luxury candy to produce only luxury candys even after an economic boom. The vice president is relying on a taste test which could have very skewed results in favor of the luxury candy. The sales increase on the luxury cand could have been very marginal while middle market candies outperformed luxury candies. Finally after an economic boom usually comes an economic downturn that could cause a recession and people to not buy luxury candies.
First, the argument focuses on a taste test as a reason to favor only producing the premium candy. A taste is usually a sampling of a small number of people and could have very skewed results. Depending on economics and area people have different taste preferences that could skew the results. Products may also fare well in a taste test but not so much in everyday consumption. The Dolci candy company could have been receiving favorable reviews of its average candy as well in tastes. If the taste test had been conducted nationwide and accounted for other factors, such as cost, it would be a much more accurate representation of consumer interest.
Second, the vice president mentions an increase in sales of the premium candy line. While an increase may have occurred, it could have been a very marginal increase that wouldn’t provide justification for only producing premium candies. Dolci may have seen an increase in sales as well for its normal candy lines that could have been potentially better at producing profit for the company. By only producing premium candies Dolci would be cannibalizing profits from ordinary candies. If the company had experienced a drastic increase in profit from the premium candies and the majority of company profit’s came from that line a focus on premium candies could be warranted. It would still be best to sell ordinary candies as well to maximize profits.
Third, the company wants to continue selling only premium candies even after the economic boom ends. It does not make economic sense to only sell high priced goods during a time of potential economic downturn. The economy could be potentially facing a time of recession. During a recession consumers tend to become more price conscious and would prefer to buy a cheaper brand to satisfy their sweet tooth. Premium priced items would not see as much sales during an economic downturn leading to lower profits for Dolci. The company could continue to make ordinary candies that would be recession proof and help keep cash flow for the company
Because the memorandum makes several unwarranted assumptions it fails to justify its case for only selling premium candies. The company needs to account for the small sample size of a taste test. While sales of the premium line may have increased other categories of the company may have seen growth as well. Finally, the company plans to sell only premium/ high priced candies during a time of potential economic downturn. The company should look into continuing to keep a diverse portfolio to keep itself better positioned in the market and poised for profits during various economic cycles.
26 Jan 2022, 10:21
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Welcome to GMAT Club!
AWA Score: 5 out of 6
I have used a GMAT AWA auto-grader to evaluate your essay.
Coherence and connectivity: 3.5/5
This rating corresponds to the flow of ideas and expressions 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: 4.5/5
The structure and division of the attempt into appropriate paragraphs are 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!
I have used a GMAT AWA auto-grader to evaluate your essay.
Coherence and connectivity: 3.5/5
This rating corresponds to the flow of ideas and expressions 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: 4.5/5
The structure and division of the attempt into appropriate paragraphs are 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!
Good Luck
umarqur
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