GMAT Essays (AWA)

Hello, I was hoping I could get feedback on the essay I just wrote. This is my 2nd AWA response I have written.

Source: OG 2018
Sample Number:44 (p 819)

The following is part of a business plan created by the management of the Megamart grocery store:

"Our total sales have increased this year by 20 percent since we added a pharmacy section to our grocery store. Clearly, the customer's main concern is the convenience afforded by one-stop shopping. The surest way to increase our profits over the next couple of years, therefore, is to add a clothing department along with an automotive supplies and repair shop. We should also plan to continue adding new departments and services, such as a restaurant and a garden shop, in subsequent years. Being the only store in the area that offers such a range of services will give us a competitive advantage over other local stores."

Discuss how well reasoned... etc.


The conclusion of the business plan is flawed in many ways. Primarily, the main flaw of the conclusion is that because a new section in Megamart saw sales increase by 20%, the way to increase sales is to add additional sections into Megamart to create a one-stop shop. Additionally, the conclusion fails to consider the differences between adding a pharmacy and adding additional sections to Megamart. Finally, the numbers provided in the conclusion are vague and fail to fully provided evidence that the new section added by Megamart is the reason for the 20% increase in sales.

The conclusion created by management suggests that sales will continue to increase as long as Megamart continues to add different sections to its store year to year. This conclusion is flawed because it assumes adding new things to the Megamart will increase the sales and does not consider if the content of the new section is what increased the sales. The management team claims that sales increased by 20% due to the addition of a pharmacy inside Megamart. This can be a fair assumption as goods and services provided by a pharmacy can be considered inelastic compared to other types of businesses. Customers could appreciate having to eliminate in additional stop with a pharmacy inside a grocery store. While goods and services provided by a pharmacy can be beneficial the conclusion does not consider the importance of the planned new sections by Megamart. Some examples of new sections that Megamart would develop are a restaurant and a garden shop. Arguments could be made for why it would be beneficial to have these things, but compared to a pharmacy shop these sections could be viewed more as luxury purchases for customers while purchases from a pharmacy could be out of necessity. One way this assumption could be improved is to carefully consider what kind of sections would be more beneficial than other sections, but even then it does not guarantee it will have the same success as the pharmacy section.

Furthermore, the assumption by the management team is that any section added will be an increase in sales. The conclusion fails to consider that just because one new section had success, does not mean that any new section added will have similar success. One section suggested by management that supports the argument that not sections will have the same success is the restaurant in the Megamart. The beginning of the passage tells us that Megamart is a grocery store, therefore their primary goods and services they provide prior to the addition of the pharmacy section would be food items. It seems redundant to add a restaurant into a grocery store when people are shopping at Megamart already for food items. This alone gives he idea that not every new section added will be as successful as the pharmacy.

Another issue to consider is the vague numbers provided by management. All that is given is that sales increased by 20% after a pharmacy was added. It is not clear whether the pharmacy is the sole reason for the increase in sales or if other factors contributed to the increase in sales. The passage only provides the increase in sales and not the bottom line. It is unclear how much it cost to develop the pharmacy section and it is entirely possible that after the additional expenses from the pharmacy section, Megamart operated at a loss in the previous year. This concern also ties to the previous flaws because different sections may be more expensive to develop than the pharmacy, and it is not a guarantee that each new section will have the same sales percentage as the pharmacy section. One way management can help their conclusion is by provide additional bottom line details since the addition of the pharmacy section, but the additional accounting information would have to provide definitive proof that the pharmacy section was the reason for the 20% increase in sales.

Because of the many flaws in the conclusion given by management, their plan to add additional sections to Megamart year by year fails to demonstrate that Megamart will continue to expect the same 20% increase year by year.