A technology analyst has been examining the business practices of a major software company, particularly focusing on their approach to...
GMAT Information and Ideas : (Ideas) Questions
A technology analyst has been examining the business practices of a major software company, particularly focusing on their approach to product monetization. The company's flagship productivity application initially offered document editing and file sharing capabilities as a complete package. However, when market research revealed strong user loyalty but limited willingness to switch to competitors, the company restructured their offering. They maintained the same core functionality but repositioned advanced collaboration tools and cloud storage integration as premium add-ons requiring additional fees. The analyst argues that this restructuring was designed primarily to extract additional revenue from the existing user base rather than to enhance the product's value proposition.
Which statement, if true, would most directly support the analyst's argument?
User feedback surveys indicated that most customers were satisfied with the original version's document editing and file sharing capabilities.
Company marketing materials emphasized that the premium add-ons would address the specific needs of users who had requested enhanced collaboration features.
The development costs for the premium add-ons exceeded the company's initial budget projections by 40%.
The software company's internal documents show that executives specifically designed the premium add-ons to generate additional revenue from users who were reluctant to switch to competing products.
Step 1: Decode and Map the Passage
Create Passage Analysis Table
| Text from Passage | Analysis |
|---|---|
| "A technology analyst has been examining the business practices of a major software company, particularly focusing on their approach to product monetization." |
|
| "The company's flagship productivity application initially offered document editing and file sharing capabilities as a complete package." |
|
| "However, when market research revealed strong user loyalty but limited willingness to switch to competitors, the company restructured their offering." |
|
| "They maintained the same core functionality but repositioned advanced collaboration tools and cloud storage integration as premium add-ons requiring additional fees." |
|
| "The analyst argues that this restructuring was designed primarily to extract additional revenue from the existing user base rather than to enhance the product's value proposition." |
|
Provide Passage Architecture & Core Elements
Main Point: An analyst argues that a software company's decision to charge separately for advanced features was motivated primarily by a desire to extract more revenue from loyal users rather than to improve the product's value.
Argument Flow: The passage establishes that a company discovered through market research that their users were loyal and unlikely to switch to competitors. Armed with this knowledge of a captive user base, the company restructured their product to charge extra fees for advanced features while keeping the core functionality the same. The analyst interprets this as a revenue-extraction strategy rather than a genuine value-enhancement effort.
Step 2: Interpret the Question Precisely
This is a fill-in-the-blank question asking us to choose the best logical connector. The answer must create the right relationship between what comes before and after the blank.
Step 3: Prethink the Answer
- The analyst's argument has two key components: (1) the company's PRIMARY motive was revenue extraction, and (2) this was NOT primarily about enhancing value
- The correct answer should provide evidence that directly reveals the company's internal motivations and shows that revenue generation from existing users was indeed the driving force
- The best evidence would be something that gives us direct access to the company's decision-making process - perhaps internal communications, executive statements, or strategic documents that explicitly confirm the revenue-extraction motive
User feedback surveys indicated that most customers were satisfied with the original version's document editing and file sharing capabilities.
- This tells us users were satisfied with the original version but doesn't directly reveal the company's motives for the change
Company marketing materials emphasized that the premium add-ons would address the specific needs of users who had requested enhanced collaboration features.
- This describes marketing materials emphasizing user needs and requests, which would actually weaken the analyst's argument by suggesting the company was responding to genuine user demands
The development costs for the premium add-ons exceeded the company's initial budget projections by 40%.
- This provides information about development costs exceeding budget but cost overruns don't tell us anything about the company's primary motivations for restructuring
The software company's internal documents show that executives specifically designed the premium add-ons to generate additional revenue from users who were reluctant to switch to competing products.
- This provides direct evidence from internal company documents showing executives explicitly designed the premium features to generate revenue from users who were reluctant to switch
- This perfectly matches our prethinking by giving us access to the company's internal decision-making and confirming that revenue extraction from captive users was indeed the driving motivation