Written in 30 minutes.
The prompt:
"The following appeared in a newsletter offering advice to investors: "Techcorporation is our top pick for investment this term. We urge all of our clients to invest in this new company. For the first time in ten years, a company that has developed satellite technology has been approved by the FTA to compete with the current satellite provider. That company is Techcorporation. A consumer survey last year indicated that over 80 percent of respondents were dissatisfied with the current satellite provider & would want to switch to another provider if the industry were not a monopoly. Thus, the new venture of Techcorporation into satellite television will prove to be highly profitable for those who invest now."" -
Write a response in which you discuss what questions would need to be answered in order to decide whether the advice & the argument on which it is based are reasonable. Be sure to explain how the answers to these questions would help to evaluate the advice.
My response:
The newsletter offers advice to investors to invest to Techcorporation that has been approved to start its journey and compete with other similar companies. It is advising the investors so because it is assumed that the new venture will be highly profitable. The assumption was backed up by a survey result. However, though the offer seems tempting, it is based on some implied assumptions and lack of proper data.
The survey yields that eighty percent of respondents are dissatisfied with the current satellite television provider, and they intend to switch to another provider if any. From this single piece of information, it is hard to understand why those respondents were dissatisfied. Was it because the monotony of television programmes, or was it the quality of broadcasting that they were dissatisfied? Techcorporation should have appropriate plan to overcome those causes of dissatisfaction. Without a proper action strategy, the new venture would not do any good to satisfy the dissatisfied respondents, and attract them to their service. The lack of information on this perspective makes the claim weaker that the new venture will prove highly profitable.
Their is another consideration to take care of - the company is going to start satellite television service for the first time, or at least after ten years. They are going to compete with the companies which are experienced in dealing with television viewers for ten years. It is evident that a lot of preparations from many perspectives such as type of programs, timing of programs, advertisement policy, news broadcasting session, broadcasting quality and so on are neede when a new venture is going to fight other experienced similar companies. There is no answer regarding this preparation in the claim of the newsletter. Without this information, it cannot be believed by the investors that the new company would be profitable.
The quality of the survey could be questioned too. Did the survey ask questions to all kinds of viewers - kids, teenagers, middle-aged people, working people, homemakers, old people and to some other kinds? Different types of people have different types of tastes of watching television programs. If it can be proved that the survey did not consider one or two particular kinds of people - it can be the kids or the old people - the claim that eighty percent of the respondents are not satisfied with the current satellite television providers is weakened, and therefore weakens the claim that the new venture will be highly profitable.
The offer advised by the newsletter seems lucrative but the investors need to know a certain things before they can be convinced that the new venture will be highly profitable. The concerns are discussed in this essay - the implied assumptions and lack of enough information are mentioned. These implied assumptions and lack of information must be taken care of before the investors can believe that the new venture will be highly profitable to invest.
The prompt:
"The following appeared in a newsletter offering advice to investors: "Techcorporation is our top pick for investment this term. We urge all of our clients to invest in this new company. For the first time in ten years, a company that has developed satellite technology has been approved by the FTA to compete with the current satellite provider. That company is Techcorporation. A consumer survey last year indicated that over 80 percent of respondents were dissatisfied with the current satellite provider & would want to switch to another provider if the industry were not a monopoly. Thus, the new venture of Techcorporation into satellite television will prove to be highly profitable for those who invest now."" -
Write a response in which you discuss what questions would need to be answered in order to decide whether the advice & the argument on which it is based are reasonable. Be sure to explain how the answers to these questions would help to evaluate the advice.
My response:
The newsletter offers advice to investors to invest to Techcorporation that has been approved to start its journey and compete with other similar companies. It is advising the investors so because it is assumed that the new venture will be highly profitable. The assumption was backed up by a survey result. However, though the offer seems tempting, it is based on some implied assumptions and lack of proper data.
The survey yields that eighty percent of respondents are dissatisfied with the current satellite television provider, and they intend to switch to another provider if any. From this single piece of information, it is hard to understand why those respondents were dissatisfied. Was it because the monotony of television programmes, or was it the quality of broadcasting that they were dissatisfied? Techcorporation should have appropriate plan to overcome those causes of dissatisfaction. Without a proper action strategy, the new venture would not do any good to satisfy the dissatisfied respondents, and attract them to their service. The lack of information on this perspective makes the claim weaker that the new venture will prove highly profitable.
Their is another consideration to take care of - the company is going to start satellite television service for the first time, or at least after ten years. They are going to compete with the companies which are experienced in dealing with television viewers for ten years. It is evident that a lot of preparations from many perspectives such as type of programs, timing of programs, advertisement policy, news broadcasting session, broadcasting quality and so on are neede when a new venture is going to fight other experienced similar companies. There is no answer regarding this preparation in the claim of the newsletter. Without this information, it cannot be believed by the investors that the new company would be profitable.
The quality of the survey could be questioned too. Did the survey ask questions to all kinds of viewers - kids, teenagers, middle-aged people, working people, homemakers, old people and to some other kinds? Different types of people have different types of tastes of watching television programs. If it can be proved that the survey did not consider one or two particular kinds of people - it can be the kids or the old people - the claim that eighty percent of the respondents are not satisfied with the current satellite television providers is weakened, and therefore weakens the claim that the new venture will be highly profitable.
The offer advised by the newsletter seems lucrative but the investors need to know a certain things before they can be convinced that the new venture will be highly profitable. The concerns are discussed in this essay - the implied assumptions and lack of enough information are mentioned. These implied assumptions and lack of information must be taken care of before the investors can believe that the new venture will be highly profitable to invest.
