GMAT - Graduate Management Admission Test

The following appeared as part of an article in the business section of a local newspaper. �The owners of the Cumquat Cafe evidently made a good business decision in moving to a new location, as can be seen from the fact that the Cafe will soon celebrate its second anniversary there. Moreover, it appears that businesses are not likely to succeed at the old location: since the Cafe�s move, three different businesses�a tanning salon, an antique emporium, and a pet�grooming shop� have occupied its former spot.� Discuss how well reasoned... etc.

In this argument the author concludes that Cumquat Cafe was correct in its decision to move to a new location. In support of this assessment the author points out that while the Cafe has been in business for two years at its new location, three businesses have failed at its previous location. The author�s line of reasoning is that the cause of the failure of the three businesses is the fact that they all occupied the same location. This argument is problematic in two important respects.

In the first place, no evidence has been offered to support the assumption that the reason the three businesses failed was their location. While location is an important contributing factor to a business� success or failure, it is not the only such factor. Many other reasons�poor business practices, lack of advertising, or poor customer service�could just as likely account for their lack of success. Lacking a detailed analysis of the reasons these businesses failed, it would be foolish to attribute their failure to their location.

In the second place, while location may have been a factor which contributed to the failure of these businesses, the reason may not have been the location itself but rather the suitability of the business to the location. For example, a pet-grooming shop or a tanning salon located in a downtown metropolitan business district is unlikely to succeed simply because this type of business is obviously unsuitable to the location. On the other hand, a bank in the same location might be extremely successful simply because of its suitability to the location.

In conclusion, the author�s argument is unconvincing. To strengthen the conclusion, the author would have to evaluate other possible causes of the failure of the three businesses, then in each case eliminate all possible causes except location.