GMAT Sample Essay 1 - Olympic Foods Prompt
Written below is an example of a GMAT Essay Prompt and a sample essay:
“Over time, the costs of processing go down because as organizations learn how to do things better, they become more efficient. In color film processing, for example, the cost of a 3-by-5-inch print fell from 50 cents for five-day service in 1970 to 20 cents for one-day service in 1984. The same principle applies to the processing of food. And since Olympic Foods will soon celebrate its twenty-fifth birthday, we can expect that our long experience will enable us to minimize costs and thus maximize profits.”
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“Over time, the costs of processing go down because as organizations learn how to do things better, they become more efficient. In color film processing, for example, the cost of a 3-by-5-inch print fell from 50 cents for five-day service in 1970 to 20 cents for one-day service in 1984. The same principle applies to the processing of food. And since Olympic Foods will soon celebrate its twenty-fifth birthday, we can expect that our long experience will enable us to minimize costs and thus maximize profits.”
(No copyright infringement is intended.)
Leave a comment if you want us to grade your essay.
Sample Essay #1:
In this argument the author concludes that the Apogee Company should close down field offices and conduct all its operations from a single, centralized location because the company had been more profitable in the past when all its operations were in one location. For a couple of reasons, this argument is not very convincing.
First, the author assumes that centralization would improve profitability by cutting costs and streamlining supervision of employees. This assumption is never supported with any data or projections. Moreover, the assumption fails to take into account cost increases and inefficiency that could result from centralization. For instance, company representatives would have to travel to do business in areas formerly served by a field office, creating travel costs and loss of critical time. In short, this assumption must be supported with a thorough cost-benefit analysis of centralization versus other possible cost-cutting and/or profit-enhancing strategies.
Second, the only reason offered by the author is the claim that Apogee was more profitable when it had operated from a single, centralized location. But is centralization the only difference relevant to greater past profitability? It is entirely possible that management has become lax regarding any number of factors that can affect the bottom line such as inferior products, careless product pricing, inefficient production, poor employee expense account monitoring, ineffective advertising, sloppy 肥大的buying policies and other wasteful spending. Unless the author can rule out other factors relevant to diminishing profits, this argument commits the fallacy of assuming that just because one event (decreasing profits) follows another (decentralization), the second event has been caused by the first.
In conclusion, this is a weak argument. To strengthen the conclusion that Apogee should close field offices and centralize, this author must provide a thorough cost-benefit analysis of available alternatives and rule out factors other than decentralization that might be affecting current profits negatively.
Sample Essay #2:
The author concluded that with long experience of 25 years, Olympic foods will be able to maximize profits and minimize costs because the processing cost has gone down in color film industry. The line of reasoning is that the same approach in film processing industry should be applicable to the other industries. This argument is not sound, however, because it is not necessary that same thing would happen to food industry. It depends upon many other factors.
Firstly, the argument assumed that the color film industry is similar to food industry. One must not forget that an Olympic food is an industry for frozen foods or perishable products. These products require fast transportation and special equipments in order to keep fresh or the entire stock will get junked. These requirements can claim substantial costs and it is very likely that they can never be cut. One the other hand, color film is a consumer product which stays much longer and is not perishable. Therefore, it is possible that the cost-cutting approach is not applicable to the food industry.
Secondly, the author failed to address other factors that are important to a company’s success. It is well known that in the long run maximization of profits occurs due to low cost of production. But it’s not the only factor they consider. Other factors such as demand for the product, selling price, and overall competition in the market should also be taken into consideration. Today, buyers become the king in the market. If other companies’ products are available at lower price with same quality or at similar price with higher quality, then people don’t buy the Olympic’s product. Therefore, if most consumers choose other companies’ products, then the objects of higher profits and lower cost can’t be attained.
Finally, the speaker did not include any information on Olympic management approach. Rather, it just mentioned the long experience of 25 years in food industry. While there is rough correlation between long experience and ability to maximize profit, it is not always the case. If the Olympic fails to accumulate valuable management experience, such as time-consuming strategic alliance, learning from failure, etc, then Olympic long experience will not enable it to minimize costs and thus maximize profits
In sum, the argument is not compelling because it omitted many other factors that must be addressed in order to make proper conclusion. If the author has considered the difference between color film and food industry, selling price, and product quality, the argument would be more convincing.
Sample Essay #3
The author argues that Apogee Company improves profitability by closing down its field offices and conducting all its operations from a single location. To support this argument, the author states that such centralization would improve profitability by cutting costs and helping the company maintain better supervision of all employees. In addition, the author points out that Apogee Company enjoyed a more profitable business in the past when it had all its operations in one location. However, the author's argument is flawed in three aspects.
In the first place, the author regards a complicated managerial issue as a single-step change in operations and ignores many relevant factors. A company's profitability is determined by a whole bunch of economic, social, political, and cultural factors as well as management skills and employees' attitude. Luck also plays an important role. It can be reasonably assumed that Apogee Company is suffering a low profitability at present. The reasons can be many, so any single adjustment without considering other possible influential factors is incomplete, and any oversimplified conclusion is unfounded.
In the second place, it is dangerous for Apogee Company to cut costs deeper and supervise employees better by resorting to centralization. The company may lose its market share because it concentrates its entire resource in one single location and has no direct access to some of those markets that it has offices at present.
It will be difficult for the company to get first-hand information and make quick decisions to fight competitors. Moreover, Apogee Company may also lose its customers' interest and trust. People always tend to conduct business with somebody who they can see whenever they want to see. Apogee Company may easily become another unfortunate company that is forgotten by its customers in a region where it does not have a permanent office.
In the third place, it is senseless to compare the present operations of Apogee Company with the operations in the past. The world is changing and the business environment is different. Competition is probably more severe than before, for example, so Apogee Company does not have the relative advantage it had. The only way for the company to keep competitive is to keep tighter relationships with its customers and provide better and quicker services to them, but this may require Apogee Company to open more offices rather than to close most of the current offices.
In sum, the author's conclusion is unfounded. To improve its profitability, Apogee Company should analyze its business environment carefully and, without losing its current business relationships, explore new opportunities. If it simply closed its current offices, the most possible result is that it loses its customers and therefore suffers even lower profitability.
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