The GMAT : An exam with greater bargins than Apple

By Nana Zheng

 

Sixty years ago on Feb. 6 1954, more than 1000 people set down in the different places all over the world to take a test for the first time. It is the Graduate Management Admission Test, and usually we simplified it as GMAT. Actually, it is an entry exam to the best business school in the world.

Back then, the 1291 perspective students paid just $10 each to take the paper exam, and it only offered 3 times a year in 5 different countries, and candidates had to wait 3 to 4 weeks to get their results. Only 54 business schools accepted GMAT scores at that time.

Today, each test taker have to pay $250 to take a computer test of GMAT and if they want their results to be sent to more than 5 universities, there is an  additional $28 charge for each score report. The test is offered year around at more than 60 sites in 113 countries. Anxious test takers receive their scores within 5 to 7 days and more than 1200 universities all over the globe require GMAT for admission.

The growth of the test reflects the spectacular rise in popularity of the MBA degree; meanwhile, the GMAT becomes a hot product. For the organization of Graduate Management Admission Council, profit margins on the exam even are better than margins that Apple makes on the ipad and the iphone. GMAC says it collected $87.7 millions in fees in 2012, yet cost the organization only $45.7 millions to administer the test, according to the documents filed with the International Revenue Service. The effective percentage of profit on the actual exam is roughly 47.9%, nearly 11 points higher than Apple current percentage of profit. 

Such a non-profit organization can be so successful due to the fact that nearly monopoly on the entrance tests for graduate business programs. People have to take the test to apply for the best business schools. However, there is a question that whether you passed the GMAT that means you have sufficient professional business ability to be one of an excellent business school or not. Actually, some business deans also express concern that the GMAT fails to measure attributes of candidates that as important as quant and verbal skills. Even some experts consider that the GMAT mostly measures analytical skills, but if you think about the leadership, innovation, and creativity, the GMAT doesn’t measure that.