GMAT Essays (AWA)

The following appeared as part of an article in the business section of a local newspaper:

"The owners of Cumquat Cafe' evidently made a good business decision in moving to a new location, as can be seen from the fact that the Cafe' will soon celebrate its second anniversary there. Moreover, it appears that businesses are not likely to succeed at the old location: since the Cafe's move, three different businesses - a tanning salon, an antique emporium, and a pet-grooming shop - have occupied its former spot."

Discuss how well reasoned...etc.

The argument that moving to a new location was a good business decision for Cumquat Cafe' is flawed for two major reasons. The idea that a second anniversary is an accomplishment is vague, there is no explanation as to how the business is doing in the second location, and the previous location has been owned by several different businesses, all of which are unrelated to Cumquat Cafe'.

To begin, the argument fails to explain why a second anniversary at it's current location is an accomplishment. Lasting two years doesn't give any indication as to how a business is performing financially, and it could be that the cafe is behind on payments and on the verge of closing. Perhaps the business came into a large sum of money to allow the move with some reserves. It is possible that Cumquat Cafe' could be losing money on a daily basis but tapping into the reserve money to pay the bills. To make the argument valid, more information needs to be given as to why two years at this location is promising. If financials were given that show increased profit margins from year one to year two, that could be a sign of a good business decision. Or, if customer satisfaction ratings have increased, and overhead costs have decreased, that could also be a sign of a good business decision. More information is needed here.

Additionally, the argument compares the cafe to several different businesses that are not related in any way. Perhaps the previous location is located on a street corner that has heavy foot traffic. In this instance, a cafe makes sense for this location and would appeal to individuals walking by who want to stop in for a quick drink or snack. The other three businesses, however, are places where people generally don't stop in on a whim. If you were to go to a tanning salon, antique emporium, or a pet-grooming shop, the argument can be made that you would have planned to go to those businesses before you left your residence. If another cafe or similar store had moved into the same location and failed, it would strengthen the argument as it would be a similar business as Cumquat Cafe'.

In conclusion, the argument that Cumquat Cafe' made a good business decision by moving to a new location cannot be supported by the information given. If the cafe had provided financials and other supporting documentation showing an increase in sales, profit margins, or less overhead costs, and if the previous location had been occupied and failed by a business similar to Cumquat Cafe', then the case could be made that it was a good business decision.