GMAT Essays, first attempt: Olympic Foods

Learning Journal

This is my first GMAT essay that I am publishing on this website. My overall impression is that I didn’t score that well here, but I made a commitment to publish my essays online and I have to honor that commitment to keep motivation high. However poor the result is, what matters is what I learned through this first exercise:

  • The optimal length of a GMAT essay seems to be about 600 words. Writing a text of this length in only 30 minutes doesn’t leave much time to hesitate on the content of each paragraph
  • The first paragraph of an essay typically recalls the argument, in its essence, and introduces the view of the writer. I think it is very important to start right away drafting these few lines, to help the mind assimilate the essence of the topic, before thinking about “how well reasoned etc.” the argument is.
  • The following 2-3 paragraphs shall be used to express the writer’s view. It is important to take a minute, before starting to write, to think exactly what is really important and strongest from the logical point of view, to be addressed. I found indeed that I came up when I was almost overtime with ideas that I could have given higher importance, and could have been easier to describe early on in the text.

My final realization is that much more exercise is needed to get a good performance within the time constrains. So I cut it short now, and go on with the next assignment 🙂

The following appeared as part of an annual report sent to stockholders by Olympic Foods, a processor of frozen foods: “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 25th birthday, we can expect that our long experience will enable us to minimize costs and thus maximize profits.” Discuss how well reasoned . . . etc.

Essay (about 400 words)

This argument presented into an Olympic Foods’ annual report states that the company will reduce its operating costs and increase its profits as it approaches its 25 th birthday, because  the long term experience in the field will allow increased efficiency. A comparison with what happened over almost 15 years in the film processing industry is brought as evidence to support this claim.

Although it is true that usually experience translates into optimization of processes and direct costs, there are several elements that could possibly lead to a different outcome, that is stable or reduced process efficiency.

For example, increase efficiency is often achieved by the implementation of new manufacturing equipment. This is particularly true for companies on the market since a long time, such as the 25-years old Olympic Food. In this case, the implementation of more modern manufacturing lines will most likely require a significant investment. As a result, profits in the years immediately following this investment might be lower for the need to pay-back the investment.

The argument is also supported by the analogy with the film processing industry, an industry that heavily dependent on the rapid appearance of new technologies to improve its manufacturing techniques. The appearance of these new technologies – for example the digital print replacing the traditional optical print – has played a major role in the cost reduction of the film processing. On the other side, the frozen food industry has not seen many breakthrough innovation in the last decades; therefore, unless a significantly new and more efficient way of processing frozen food is in sight, it is unlikely that the costs will drop down in a similar fashion.

Finally, the impressive drop in price of the film processing industry, might not be originated at all by increased process efficiency. It is indeed possible that the fierce competition has forced the company to lower the price by reducing the margins on the selling price of the prints. Considering most of the traditional photography processing companies are in deep financial troubles nowadays (e.g., Ilford, Kodak etc.) this could be a plausible scenario, and certainly not a desirable one for Olympic foods.

In conclusion, even though in some cases it is observed a price drop of certain services over time, this is not necessarily due to the improved process efficiency by experience, nor it is a pattern that can be considered of general validity across very different industrial fields. Additional and stronger evidence should be brought to the attention of the stockholders to support this statement.

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