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.

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

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.

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
_________________

Hi bawatwr,

As mentioned in this post, we're not really looking to quantify the investment. Value is used here more in a "how useful was it?" sense. In other words, this is another way of saying that the investment in service improvement was not very ~"useful".
_________________

How come no one talks about Q5 :(! Am I the only one who got it wrong?
"This truth was not apparent to managers of one regional bank, which failed to improve its competitive position despite its investment in reducing the time a customer had to wait for a teller."
=> Doesn't this imply that improving its competitive position is more urgent/ a better choice? (The wordings: Failed, despite). If the author wanted to communicate neutral/ non-urgent tone, he would have said "This regional bank chose to invest in service and not its competitive position." However, the wordings "failed" and "despite" imply that it would have been better for them to focus on its competitive position.

Would someone please explain? GMATNinja?

Thanks!

Hi

On this topic, the passage states the following:

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.

In other words, the similarity between service investments and production and distribution investments is that they "must be balanced" against other options "on the basis of direct, tangible benefits" ie; service investments, just like production and distribution investments, must be compared with other potential investments, measuring the direct tangible benefits that each would accrue, before deciding on going ahead.

Option (A) says: tangibility of the benefits that they tend to confer

This assumes that service, distribution and production investments all provide tangible benefits, whereas the passage only tells us that any tangible benefits must be evaluated. We do not know if all such investments will provide benefits or not. Hence, this cannot be common to these investments.

Option (C) says: basis on which they need to be weighed

This is clearly consistent with the passage, as evidenced by the phrase "must be balanced" ie, must be "weighed" against others. Therefore this is the correct answer.

Hope this helps.
_________________

Hi medhamahrishi31,

For Q3, Please refer: https://gmatclub.com/forum/the-fact-tha ... l#p1909515

For Q4, Please refer: https://gmatclub.com/forum/the-fact-tha ... l#p2069596

For All Questions, Please refer the OE's: https://gmatclub.com/forum/the-fact-tha ... l#p2372969 - (79-84)

Let me know if you still have doubts.

Thanks.

Hi, adkor95,

Please refer the answer by expert here:

https://gmatclub.com/forum/the-fact-that-superior-service-can-generate-a-competitive-advantage-fo-67847-20.html#p1909515

Let me know if this clears your doubt.

Thanks.

Hi

You have confused the word "advantage" with "attribute". An advantage is something that is good or better than others. In this case, the fact that it could be described easily definitely counts as an advantage.

However, the answer option is not talking about advantages but about "attributes", or, characteristics. From the passage, we do not know whether the fact that it can be described easily counts as a primary or secondary attribute. Additionally, we do not know enough from the passage to clearly state what should, in fact, count as the primary attribute. Therefore, the word "only" cannot be used for the purpose stated in this option.

Hope this helps.
_________________

Hi

The highlighted sentence brings out a negative aspect of the service improvement. Since the service improvement was brought in with the aim (one of) of attracting new customers, this sentence tells us that it failed to do so because customers have great inertia in switching banks. They would have opted to remain with their current banks rather than switch to this regional bank just have a lower teller waiting time.

Hope this clarifies.
_________________

You have asked:

"Does (1) mean: the existing customers stayed BECAUSE it was inconvenient for them to change to another bank, NOT BECAUSE the improved service made them stay?"

(1) is not talking about the existing customers of the bank which implemented the service improvement (let's call it bank X), but about customers of other banks that bank X had hoped to attract to itself due to this service improvement. The highlighted text states that such customers would not have shifted from other banks to bank X despite the service improvement at bank X due to the high inertia in changing banks.

Hope this helps.
_________________

More than Half of the questions, less than 50% people got it right? Shouldn't it be a 700-level question?

"Only merit" is the "only advantage" or "sole plus point" that came out of the improvement in standard of service by reducing the amount of time a customer has to wait for the teller.

Merit: The customers could be explained easily that they wouldn't have to wait long anymore to see the teller.

Lets try this:

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

- Pls explain how does the OA fit in our interpretation of 'only' that you suggested before reading the question/option.

I don't understand what you are trying to convey. OA is making perfect sense. My answer before was just to convey literal meaning of the word "only". I didn't answer the question from the perspective of author's tone while using the word "only". Furthermore, rest all of the options are not correct.

Actually found the OA's guys

Here they are: