Note to self:
1. Stay more to the point.
2. Use fewer words.
Words to use again:
Likewise, Just as likely, Unfounded,
“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 twenty-fifth birthday, we can expect that our long experience will enable us to minimize costs and thus maximize profits.”
Olympic Food’s 25th birthday will be a great milestone for the company, but efficient performance and lowered costs cannot be reasonably assumed. The Annual report has two serious flaws. It contains a weak analogy and a wrong assumption.
First, the author draws a weak analogy between two unrelated industries. Admittedly, time provides experience and technological advances that often help companies work efficiently. One cannot assume, however, that Olympic Foods will experience the same benefits of increased efficiency as the color film industry. Because Olympic and the film processing industry are vastly different, it is highly doubtful that the fact about the film industry can be applied to Olympic. For instance, unlike development companies, Olympic Foods may choose not to deviate from its traditional methods. Perhaps new methods pose new problems and expenses Olympic cannot handle.
Second, the author forecasts that the company’s age has made it a stronger company. We should not assume that Olympic is capable of fulfilling such a claim, seeing that there is no evidence that supports it. Often company performance lags as time progresses. Take for example K-mart department stores, which shut down as a weak company after a period of success. Moreover, the author fails to mention that other factors besides inefficiency could raise production costs. New methods of efficient food preservation could be developed that increase food quality but also increase costs. Even if Olympic becomes more efficient, one cannot assume that its costs will go down.
In the final analysis, the 25th birthday of Olympic Foods is no proof of increased efficiency and lower costs. The author would have to provide evidence that the company has learned how to do things better in the last 25 years. The author also cannot rely on his analogy because the two industries are too dissimilar. Supporting examples from similar companies would be more convincing evidence.
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