GMAT Essay Topic 441 - The following appeared as part of the business plan of an investment and financial consulting firm. "Studies suggest that an average coffee drinker's consumption of coffee increases with age, from age 10 through age 60. Even after age 60, coffee consumption remains high. The average cola drinker's consumption of cola, however, declines with increasing age. Both of these trends have remained stable for the past 40 years. Given that the number of older adults will significantly increase as the population ages over the next 20 years, it follows that the demand for coffee will increase and the demand for cola will decrease during this period. We should, therefore, consider transferring our investments from Cola Loca to Early Bird Coffee." Discuss how well reasoned . . . Etc.
In this argument, the arguer claims that the firm should transfer its investments from cola to coffee. To substantiate the
In this argument, the arguer claims that the firm should transfer its investments from cola to coffee. To substantiate the conclusion, the arguer provides the studies that the average consumption of coffee increased and that of cola decreased with age. In addition, the arguer points out that the trend will continue in the future due to the increasing number of older adults. The evidence presented throughout the argument, however, is insufficient and therefore does not lend strong support to the conclusion.
In the first place, the assumption on which the argument relies is supported with adequate data or projection. The arguer assumes that the supply conditions will remain unchanged over the next 20 years. Yet another possibility is that more and more people are choosing cola rather than coffee in their daily lives. If so, the investment to Cola Loca will bring higher profits than Early Bird Coffee.
In the second place, the arguer fails to establish a causal relationship between the increasing number of coffee consumers and corresponding increase in profits in the coffee industry. It is equally possible, for example, that more consumption of coffee attracts more manufacturers to come into the coffee market so that the total profits will be distributed. As a result, not every firm will receive the expected interests.
Last but not least, the arguer fails to rule out other possible factors that might have contributed to the cited trends in the past 40 years. For instance, the consumption of coffee increased for such special reasons as that the price of it lowered a lot. If the price trend to rise in the future, the rise will make people look for other substitutes such as cola.
In conclusion, the arguer fails to demonstrate that transferring the investments from cola the coffee is a sensible decision. To solidify this argument, the arguer would have to provide more concrete information about the increase in consumption of coffee. Furthermore, more evidence should be presented to convince us that the demand for coffee will increase as well and bring more profits.