The fact that superior service can generate a competitive

Question

The fact that superior service can generate a competitive advantage for a company does not mean that every attempt at improving service will create such an advantage. Investment 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. ....

Qus: 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.

Could you folks answer this with explanation?

C

Thanks much

maverick_ucdc · Answer

OK eleminate C, D, E right away. Look at the explainations.

Now u r left with A & B

Then pick A. If anyone has a better reason I would like to hear about it.

A) tangibility of the benefits that they tend to confer. 
Yes - because there are more benefits than increased revenue

B) increased revenues that they ultimately produce 
It is a close call but increased revenue dosent mean increased profit, profit=revenue - cost

C) basis on which they need to be weighed. 
The basis are already defined in second sentence 

D) insufficient analysis that managers devote to them 
Irrelevant

E) degree of competitive advantage that they are likely to provide. 
Look at the 2nd sentence - they are talking about tangiable gains. So easily elimiate it too.

dj · Answer

I will go for C.
passage says:
..balanced against other types of investments on the basis of direct, tangible benefits ..."
defines the bases on which benefits should be measured.. C confers

asandeep · Answer

Should be A.

The examples in the second part of the sentence "tangible benefits such as cost reduction and increased revenues." clearly indicate that the "cost reduction" and the "increased revenues" are applicable to both kinds of investment.

Official ans ?

stoolfi · Answer

I vote C. Agree with dj.

It's right there in plain English!

joshnsit · Answer

Hi dj,All, I am facing hard time in justifying C as answer. Can you please state your reasons for conferring C as answer? What is wrong with A and B?
I will appreciate any explanations from RC gmatclub gurus towards this RC.

Nikhil · Answer

Discussed here the-fact-that-superior-service-can-generate-a-competitive-advantage-fo-67847.html

The fact that superior service can generate a competitive

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