The fact that superior service can generate a competitive advantage fo

Hello Rudranket,

Look at the below lines from the passage :
The only merit of the improvement was that it could easily be described to customers.


Now look at the question:
The passage suggests which of the following about service provided by the regional bank prior to its investment in enhancing that service?

The passage clearly says there was no improvement to the existing service level or it helped in adding new customers better then earlier. So we can derive that the existing service was good enough to attract the customers.

(A) It enabled the bank to retain customers at an acceptable rate
(B) It threatened to weaken the bank’s competitive position with respect to other regional banks

Option A re-iterates the same position. Hence it is the correct answer.
Let me know if you have any further doubts.

Q1 :- The primary purpose of the passage is to
(B) suggest more careful evaluation of a type of business investment
The first passage discussed about the situation "superior service" can get the advanced and not. the second is a example of this view.

Q3 :- The passage suggests which of the following about service provided by the regional bank prior to its investment in enhancing that service?
(A) It enabled the bank to retain customers at an acceptable rate

Enhancing bank's service did not bring to the bank's expected result, since they did not know the real reason why customers use their bank ( they are lazy to change bank ). It means that if the bank did no improve the service, the customer would not leave to another bank.

Q4 :- The passage suggests that bank managers failed to consider whether or not the service improvement mentioned in lines 18-20
(D) was an innovation that competing banks could have imitated
"Nor did they analyze their service improvement to determine whether it would attract new customers by producing a new standard of service that would excite customers or by proving difficult for competitors to copy."

Q5 :- The discussion of the regional bank (line 13-24) serves which of the following functions within the passage as a whole?
(E) It provides an example of the point about investment in service made in the first paragraph.
As mentioned in question 1, the second passage is an example of the first.

Q6 :- The author uses the word “only” in line 23 most likely in order to
(B) emphasize the relatively low value of the investment in service improvement
The last sentence can be seen as a conclusion of the second passage that improving service does not always bring an advanced to the company.

Question 2 I choose A and still not grasp thoroughly answer C.

Hi Manish,
I understand why the option A looks good as compared to B. But, why the option 'D' can't be answer to this ? can you pls explain. Thanks!

anchal - Why do you think (D) is correct. Can you give your reasoning?

Let's start with summarising the passage in a few points:
1. Investment in service must be evaluated like those in production and distribution
2. If a company provides service that avoids damaging reputation and keeps customers leaving at an unacceptable rate then investment in service wasted
3. Service is a deciding factor for customers only in extreme situations
4. Eg of a regional bank investing in wait time for a teller
5. Points not analysed - customer inertia to switch banks, will it attract new customers, is it easily imitable
6. Only merit - can be easily communicated to customers.

Coming to the questions:
Q1. Primary purpose
The passage clearly talks about aspects to evaluate when investing in service. This is clearly brought out in option B.

Q2. This question is clearly answered in the first point of our summary. Investments in service, production and distribution should be evaluated on similar parameters. Thus, the answer is C - "basis on which they need to be weighed"

Q3. In the passage the author does not point out any apparent business problem for the bank. In point no. 2 of our summary it talks about the two areas when investment in service might be a waste - which is what is also proved for the bank later. Thus, it had to be either service preventing a damaging reputation or which prevents customers from leaving at an alarming rate. In that case the best answer is Option A

Q4. In this question, check by elimination:
A. This was the only merit of the improvement: it could be communicated easily, so incorrect
B. There is no mention of measuring the customer experience in the passage, so incorrect
C. Scaling up and sustainability of the service improvement is not mentioned, so incorrect.
D. This is mentioned as a point by the author while critiquing the service improvement as a point not considered by the bank's managers. (part of point 5 in the summary), so CORRECT.
E. The service level of the bank is no where mentioned as being less than that of its competitors
So, the answer is D.

Q5. In this question also all points need to be considered:
A. By the tone and the first paragraph the author is clear that investments in service need to be well evaluated. So, incorrect.
B. The example does not mention that this investment was done at the cost of another area requiring urgent investment. So, incorrect.
C. Again, in the example only the particular area of service improvement is mentioned and no other alternate within service is mentioned. So, incorrect.
D. The author does not dive deep into aspects of service which should be invested in and which should not be invested in. So, incorrect.
E. The author is actually pointing out that the bank was doing fairly well when it comes to competition. In that respect investment in service was unnecessary. So, this is the correct option

Q6. In the example, the author has completely critiqued the investment put in by the bank. However, as a saving grace he mentions a sole possible benefit. The word "only" thus helps to showcase the limited value of the particular investment. So, the correct option is B.

Sent from my Lenovo K50a40 using GMAT Club Forum mobile app

Could somebody explain Q3 Please.

Where in the heaven is it mentioned that "It enabled the bank to retain customers at an acceptable rate" ?? :/

Tricky passage. Easy language. But in haste, there is a lot of score to waste.

Q.2 C is correct because when we say Investments in service, like investment in production & distribution, must be balanced against other types of investments on the basis of.
Now, if we need to compare investment in service and investment in other types, we could have chosen A. However, B is a part of A, and the choice would have become diffcult. However, the question asks us about comparison between service and production / distribution. Thus, because both the investments in services & production have to be balanced against other types on some basis, it is the basis which is common. Once again, tangibility can be a ground for comparison between investment in service and other types of investment.

Q.4 Option B is incorrect because it mentions "experiences of the customers", is different from attracting new customers on the basis of excitement. While the passage only talks about new customers, the options suggests to talk about existing customers too. Excited does not necessarily mean change in experience. Change in experience can be negative too. Option D is straightforward.

Hello GMATNinja ,
I would really appreciate your help in the following questions, in light of the retained options.
Thank You.

Q2. According to the passage, investments in service are comparable to investments in
production and distribution in terms of the

A. tangibility of the benefits that they tend to confer
B. increased revenues that they ultimately produce
C. basis on which they need to be weighed
" Investments in service,
like those in production and distribution, must be
balanced against other types of investments on the
basis of direct, tangible benefits such as cost
reduction and increased revenues."

Q4. The passage suggests that bank managers failed to consider whether or not the
service improvement mentioned in lines 18–20

B. made a measurable change in the experiences of customers in the bank’s
offices

D. was an innovation that competing banks could have imitated
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Can someone please explain the primary purpose question to me . Since option C which states that how some investment could fail to be a competitive advantage and hence not result in revenue is what is the purpose of the passage is and the same is discussed in Paragraph 2 of the passage by stating an example of the regional banks . So why is option C incorrect ??

Q4 . The passage suggests that bank managers failed to consider whether or not the service improvement mentioned in lines 18-20

I have concern regarding Option B . It is mentioned in the passage that
" Nor did they analyze their service improvement to determine whether it would attract new customers by producing a new standard of service that would excite customers " . Doesn't Option B convey the same meaning of exciting customers.

Made a measurable change == Exciting Customers .

Making a measurable change does not necessarily mean "exciting customers."

According to the passage, the bank managers did not analyze their service improvement to determine whether it would attract new customers by producing a new standard of service that would excite customers. So, yes, you could say that the managers failed to analyze whether the change would excite people enough to cause them to switch banks. And excitement of customers might be a measurable change. So the managers may have failed to consider ONE possibly measurably change.

But did they fail to consider whether the service improvement would make a measurable change in the experiences of customers (choice B)? The regional bank managers DID consider whether the service improvement would reduce wait times, and that is certainly a measurable change. Even if they failed to consider excitement, they definitely considered wait times. So the managers definitely considered whether the improvement would make a measurable change. (B) has to be eliminated, as described in an earlier post:


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can someone please explain me question 3?

Please refer to this post: https://gmatclub.com/forum/the-fact-tha ... l#p1909515
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hongg7, please check out this earlier post. Let us know if that doesn't clear things up.
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According to the passage, investments in service are comparable to investments in production and distribution in terms of the
(A) tangibility of the benefits that they tend to confer
(B) increased revenues that they ultimately produce
(C) basis on which they need to be weighed
(D) insufficient analysis that managers devote to them
(E) degree of competitive advantage that they are likely to provide

OG explanation
A the author is not equating the tangible benefits the different kinds of investments reap but rather the basis on which decisions to make investments are made.
B Revenues generated from investing in service are not said to be comparable to revenue generated from investing in production and distribution.
C correct An evaluation of whether or not to make these investment must be made on the same basis. However, i couldn't find any connotation
regarding comparison

i am not able to comprehend these convoluted explanation. Experts please help BKimball mikemcgarry carcass GMATNinjaTwo chetan2u daagh GMATNinja

C is the only possible answer

A. (A) tangibility of the benefits that they tend to confer

The passage suggests that you need to counterbalance the main effect with other investments and the benefits the latter brings in. It is indirect benefits NOT direct.

(B) increased revenues that they ultimately produce

I didnt see revenue here

(D) insufficient analysis that managers devote to them

I didnt see managers here. Neither to take a cup of coffee

No level of competitiveness is mentioned.

I hope now is more clear. Please leave kudos
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Can anyone help with this?

The answer for Q6 does not seem correct

Q6. The author uses the word “only” in line 23 most likely in order to

(A) highlight the oddity of the service improvement
(B) emphasize the relatively low value of the investment in service improvement
(C) distinguish the primary attribute of the service improvement from secondary attributes
(D) single out a certain merit of the service improvement from other merits
(E) point out the limited duration of the actual service improvement

At no point in the passage is mentiond,the value of INVESTMENT in the service. What the passage actually tries to convey was that the RETURN ON INVESTMENT was not upto the mark.

Posted from my mobile device[/quote]

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Let me try if I can clear your doubt.
The passage states the return on investment is zero in attracting new customers. The way or tone here in this case is a bit sarcastic.
If there is at least some improvement on return of investment, then your words come into the picture.

Nice work, krishnabalu!

In choice (B), "value of the investment" does not refer to the literal amount of money invested. Instead, it refers to the worth or merit of that investment.

For example, if you consistently score 51 on the quant section of the GMAT and spend several hours each day studying quant only, you might say that your study time has little value. In this example, "value" doesn't refer to the investment itself (or, in this case, the time spent). Instead, it refers to the output -- what you are getting out of that time investment.

Similarly, if the only merit of a service improvement was that it could easily be described to customers, then we could say that the investment in the improvement had little value.

I hope that helps!
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