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pg850
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AWA ESSAYS: Analyze Argument
ESSAY QUESTION:
The following appeared in a memo to executives at a company that manufactures industrial equipment:
"We are spending too much on free customer service after a sale has been made; we need to limit our warranty to two years in order to improve our profit margins. The current lifetime warranty can lead to costs decades into a product's life cycle. Also, we pay our customer service employees a premium because they must possess expert skills across the entirety of our very diverse product line, including products we no longer sell."
Discuss how well reasoned you find this argument. Point out flaws in the argument's logic and analyze the argument's underlying assumptions. In addition, evaluate how supporting evidence is used and what evidence might counter the argument's conclusion. You may also discuss what additional evidence could be used to strengthen the argument or what changes would make the argument more logically sound.
YOUR RESPONSE:
The writer argues that in order to improve profit margins, the company needs to make certain policy changes regarding the product warranty that it offers. As per the writer, the company needs to limit the warranty to two years as this would save them from costs occuring decades into a product's life cycle. Also, the salaries of its customer service employees would decrease as their required skillset would be narrowed since they would no longer be required to possess expert skills across the entirety of the company's diverse product line, including products which they no longer sell. This argument has several loopholes which make it shortsighted and incomplete.
The profit margin of a company is one of the most important indicators of a company in terms of its competitiveness and future prospects. However, to claim that a single policy change such as that mentioned above would have an impact as forseen by the writer is immature. The author fails to take into consideration any other impacts that the policy change would have. A lot of its customers might switch to other companies providing industrial equipment if they offer lifetime warranty. This would adversely affect the sales of the writer's company which in turn would lead to lower margins. For example, lets say that Dell and HP offer the same lifetime warranty on their laptops and for the same price. Now, if Dell decides to cut this lifetime warranty to two years but keeps its sale price the same as Compaq, which is what it would need to do in order to increase its profit margins, would the customers stick with Dell or switchover to Compaq? Therefore, unless we can get a comprehensive market assessment study done for the competitors of the company mentioned in the argument, we cannot make a decision as to what would be the effect of the policy change on the company's profit margins.
Another assumption the author makes is that the premium on the customer service employees comes down with the suggested policy change. This may or may not affect the profit margins of the company. With the reasoning used above, this policy change would probably lead to an outflux of their best customer representatives to companies that still offer lifetime warranties and require their skillset. This would lead to a brain drain for the company which can adversely affect the profit margin in the long term. Also, we don't know what percentage of the product line actually requires servicing for longer than 2 years. It could be possible that a very minor percentage of products actually require that kind of servicing and so the company does not need to have a large percentage of its workforce to have extensive knowledge about the product line.
Overall, I feel the argument is flawed and does not consider various other factors that could increase its profit margins. Even the reasons the author mentions have loopholes and thus this argument cannor be considered concrete or well reasoned.
ESSAY QUESTION:
The following appeared in a memo to executives at a company that manufactures industrial equipment:
"We are spending too much on free customer service after a sale has been made; we need to limit our warranty to two years in order to improve our profit margins. The current lifetime warranty can lead to costs decades into a product's life cycle. Also, we pay our customer service employees a premium because they must possess expert skills across the entirety of our very diverse product line, including products we no longer sell."
Discuss how well reasoned you find this argument. Point out flaws in the argument's logic and analyze the argument's underlying assumptions. In addition, evaluate how supporting evidence is used and what evidence might counter the argument's conclusion. You may also discuss what additional evidence could be used to strengthen the argument or what changes would make the argument more logically sound.
YOUR RESPONSE:
The writer argues that in order to improve profit margins, the company needs to make certain policy changes regarding the product warranty that it offers. As per the writer, the company needs to limit the warranty to two years as this would save them from costs occuring decades into a product's life cycle. Also, the salaries of its customer service employees would decrease as their required skillset would be narrowed since they would no longer be required to possess expert skills across the entirety of the company's diverse product line, including products which they no longer sell. This argument has several loopholes which make it shortsighted and incomplete.
The profit margin of a company is one of the most important indicators of a company in terms of its competitiveness and future prospects. However, to claim that a single policy change such as that mentioned above would have an impact as forseen by the writer is immature. The author fails to take into consideration any other impacts that the policy change would have. A lot of its customers might switch to other companies providing industrial equipment if they offer lifetime warranty. This would adversely affect the sales of the writer's company which in turn would lead to lower margins. For example, lets say that Dell and HP offer the same lifetime warranty on their laptops and for the same price. Now, if Dell decides to cut this lifetime warranty to two years but keeps its sale price the same as Compaq, which is what it would need to do in order to increase its profit margins, would the customers stick with Dell or switchover to Compaq? Therefore, unless we can get a comprehensive market assessment study done for the competitors of the company mentioned in the argument, we cannot make a decision as to what would be the effect of the policy change on the company's profit margins.
Another assumption the author makes is that the premium on the customer service employees comes down with the suggested policy change. This may or may not affect the profit margins of the company. With the reasoning used above, this policy change would probably lead to an outflux of their best customer representatives to companies that still offer lifetime warranties and require their skillset. This would lead to a brain drain for the company which can adversely affect the profit margin in the long term. Also, we don't know what percentage of the product line actually requires servicing for longer than 2 years. It could be possible that a very minor percentage of products actually require that kind of servicing and so the company does not need to have a large percentage of its workforce to have extensive knowledge about the product line.
Overall, I feel the argument is flawed and does not consider various other factors that could increase its profit margins. Even the reasons the author mentions have loopholes and thus this argument cannor be considered concrete or well reasoned.
