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babuxavier
- Senior | Next Rank: 100 Posts
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Analysis of Argument
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Davis Technologies, a computer-chip maker, could solve its problem of declining sales by dropping its prices. This would make Davis better able to compete in the highly competitive computer chip market. The sales of chips would increase and this would substantially boost Davis' market share.
Describe how well reasoned you find this argument. In the discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counterexamples might weaken the argument's conclusion. You may also address possible changes in the argument that would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.
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The argument claims that Davis Technologies could improve sales by merely dropping its price. The company is assuming that reduced price would make
them highly competitive in computer chip market. Stated in this way the
argument takes some major leap of faith that compute chip market is price
sensitive and is governed by price changes. This leap of faith is clearly not
developed on strong evidence and which is not elaborated well in the
passage. Therefore the argument is rather weak, unconvincing and flawed. It is
more of a wish full thinking then an argument.
First the argument readily assumes the computer chip market to be price
sensitive , hence if Davis Technologies is able to reduce the price and gain
market share or increase sales. Traditionally computer chip market with
players like sony, AMD, Intel and others is mostly driven by innovation, updated
product lines, and product related characteristics. This markets are price
sensitive to some extent but at some point product characteristics helps
making this wining decision. This is clearly seen in some industry examples
as well , for example Intel was loosing market share and sales as compared
to AMD, Even though Intel chips where chipper due mass and scale of
production. They lost market share just because AMD chips was more faster
and better compared to same price point as that of intel. This real examples
clearly suggest that sales of computer chip is not only guided by price
movement as compared to peers but product characteristics. This are better
expressed in terms of clock speed per USD.
Secondly, the computer chip market is more of business to business and
does not directly get governed by consumer wants. This market is more
controlled by specifications and software compatibility and requirement. In
such cases Davis Technology need to not only reduce cost but develop and
innovate the product to address customer requirements. The Company should
be able to sense the market movement and requirements. For example earlier
processors where built with single CPU but with higher cache configuration
and usually let scheduling and loading activity to OS. Current generation chips
have built in multi core, to take up heavy load of multi-tasking and reduced
scheduling capability of OS. Similarly current generation processors have
better energy management system to accommodate requirement of portable
computing. All this examples suggest a strong link of increased sales to
product characteristics and market requirement. The success of such
companies operating in dynamic market of computer chips , need to be agile
and adaptable and still have strong focus on cost so that they do not lose out
either on cost front or on capability front.
Finally, The argument concludes that once price of chip is reduced, Davis
Technologies will be able to gain market share against competitors and
increase sales. This statement is clearly a leap of faith argument and
assumes the computer chip market to be a price sensitive market. In reality as
explained above this market is not price sensitive alone but price & capability
sensitive evolving market. As a result , this conclusion is not valid and is a wish
full thinking of the author.
In summary, the argument is flawed and therefore unconvincing. It could be
considerably strengthened if the author clearly mentioned all the relevant facts.
In order to assess the merits of a certain situation, it is essential to have full
knowledge of all contributing factors.
-----------------------------------------------------------------------------------------------------
Davis Technologies, a computer-chip maker, could solve its problem of declining sales by dropping its prices. This would make Davis better able to compete in the highly competitive computer chip market. The sales of chips would increase and this would substantially boost Davis' market share.
Describe how well reasoned you find this argument. In the discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counterexamples might weaken the argument's conclusion. You may also address possible changes in the argument that would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.
-----------------------------------------------------------------------------------------------------
The argument claims that Davis Technologies could improve sales by merely dropping its price. The company is assuming that reduced price would make
them highly competitive in computer chip market. Stated in this way the
argument takes some major leap of faith that compute chip market is price
sensitive and is governed by price changes. This leap of faith is clearly not
developed on strong evidence and which is not elaborated well in the
passage. Therefore the argument is rather weak, unconvincing and flawed. It is
more of a wish full thinking then an argument.
First the argument readily assumes the computer chip market to be price
sensitive , hence if Davis Technologies is able to reduce the price and gain
market share or increase sales. Traditionally computer chip market with
players like sony, AMD, Intel and others is mostly driven by innovation, updated
product lines, and product related characteristics. This markets are price
sensitive to some extent but at some point product characteristics helps
making this wining decision. This is clearly seen in some industry examples
as well , for example Intel was loosing market share and sales as compared
to AMD, Even though Intel chips where chipper due mass and scale of
production. They lost market share just because AMD chips was more faster
and better compared to same price point as that of intel. This real examples
clearly suggest that sales of computer chip is not only guided by price
movement as compared to peers but product characteristics. This are better
expressed in terms of clock speed per USD.
Secondly, the computer chip market is more of business to business and
does not directly get governed by consumer wants. This market is more
controlled by specifications and software compatibility and requirement. In
such cases Davis Technology need to not only reduce cost but develop and
innovate the product to address customer requirements. The Company should
be able to sense the market movement and requirements. For example earlier
processors where built with single CPU but with higher cache configuration
and usually let scheduling and loading activity to OS. Current generation chips
have built in multi core, to take up heavy load of multi-tasking and reduced
scheduling capability of OS. Similarly current generation processors have
better energy management system to accommodate requirement of portable
computing. All this examples suggest a strong link of increased sales to
product characteristics and market requirement. The success of such
companies operating in dynamic market of computer chips , need to be agile
and adaptable and still have strong focus on cost so that they do not lose out
either on cost front or on capability front.
Finally, The argument concludes that once price of chip is reduced, Davis
Technologies will be able to gain market share against competitors and
increase sales. This statement is clearly a leap of faith argument and
assumes the computer chip market to be a price sensitive market. In reality as
explained above this market is not price sensitive alone but price & capability
sensitive evolving market. As a result , this conclusion is not valid and is a wish
full thinking of the author.
In summary, the argument is flawed and therefore unconvincing. It could be
considerably strengthened if the author clearly mentioned all the relevant facts.
In order to assess the merits of a certain situation, it is essential to have full
knowledge of all contributing factors.
