GMAT : Analysis of An Issue

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An Issue

26. Location has traditionally been one of the most important determinants of a business's success. The importance of location is not likely to change no matter how advanced the development of computer communications and other kinds of technology becomes.


Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/ or examples from your own experience, observations, or reading.


In retail or storefront business, location is still a key ingredient of business success. The extent, to which this will continue to be true, given the inexorable growth of Internet commerce, will vary among industries.

In more traditional retail sectors, such as clothing, cosmetics and home improvement, an in-person visit to retail store is often necessary to try on clothes for fit, compare fragrances or browse among a full selection of textures, colours and styles. Also, activities such as shopping and dining out are for many consumers who want to have enjoyable experiences in themselves, as well as excuses to get out of the house and mingle with others in their community. Finally, shipping costs for large items such as appliances and home-improvement items render home shopping impracticable. Thus, burgeoning technologies pose no serious threat to Main Street and location will continue to play a pivotal role in the fate of many retail businesses.

Nevertheless, technology-related industries are sure to move away from physical storefronts to virtual ones. Products that can be reduced to digital bits and bites such as books and magazines, recordings and software applications are more efficiently distributed electronically. Computer hardware will not disappear from Main Street quite so quickly, though, since its physical look and feel enters into the buying decision. Computer superstores should continue to thrive alongside companies such as Dell which does not distribute through retail stores.

In conclusion, consumer demand for convenient location will continue with respect to certain tangible products, while for other products alternative distribution systems will gradually replace the storefront rendering location an obsolete issue.

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