GMAT Essay Topic 542 - The following appeared in a memorandum to the work-group supervisors of the GBS Company. "The CoffeeCart beverage and food service located in the lobby of our main office building is not earning enough in sales to cover its costs, and so the cart may discontinue operating at GBS. Given the low staff morale, as evidenced by the increase in the number of employees leaving the company, the loss of this service could present a problem, especially since the staff morale questionnaire showed widespread dissatisfaction with the snack machines. Therefore, supervisors should remind the employees in their group to patronize the cart --after all, it was leased for their convenience so that they would not have to walk over to the cafeteria on breaks." Discuss how well reasoned . . . Etc.
In this argument,the author recommends that transfering investment from Cola Loca to Early Bird Coffee.To support this recommendation,the author points out that the number of older adults will significantly increase over the next 20 years.The author also cites studies indicating that coffee consumption increases with age while colar consumption declines with increasing age.Based on this evidence,the author concludes that coffee demand will increase while cola demand will decrease during the next 20 years.Therefore,it is advisable to transfer investments from Cola Loca to Early Bird Coffee.However,this argument is unwarranted with unconvencing evidence and unlogical problems.
First of all,although trends cited in the studies have remained stable for the past 40 years,there is no guarantee that the same trend will continue over the next 20 years.The research results can only reflect the habits of the last generation under study.If drinking habits of this generation change as time changes,the study’s results can hardly be used to predict the future.Perhaps as the whole population ages,people in their’s 60’s will feel they are still young and want to show off their energy and vigor by continuing to drink cola.If that is the case,the credibility of the writer’s assumption is called into question.
Moreover,the mere fact that the number of older adults will significantly increase over the next 20 years is not sufficient to support the conclusion that the demand for cola will decrease while demand for coffee increases. The author fails to consider and rule out other factors that might account for the changes in demand.The supply and cost of cola and coffee beans,as well as other costs of doing business as a producer of coffee and cola,which in turn fluctuate over a long time period.These factors may affect comparative prices of coffee and cola,which inturn may affect comparative demand for coffee and cola.In addition,although demand for cola by older adults might decrease the youth sectors’ consumption of cola might rise.As a result,increase in the demand from young people may offset the
decrease from the old people,and boost the sales of cola as a whole.
Finally,even if the trends given in the argument will be true over the next 20 years,it does not necessarily
indicate that investing in Early Bird Coffee will be more profitable than investing in Cola Loca.The author
unfairly applies the general trend in the whole industry to specific companies。It is entirely possible that Cola Loca employs the right advertising strategy and will enlarge its share of the cola market.Therefore,it is unwise to transfer investments without investigating the specific conditions of the two business.
In conlusion,it is groundless to draw conclusion simply on the basis of evidence presented.To make a wise investment, the author would have to take into account other factors that might affect consumer trends in the future.To strengthen the argument,the author should also investigate more possibilities in the specific companies.