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555-605 Level|   Business|   Short Passage|                                             
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sriharsha4444
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The fact that superior service can generate a competitive advantage 13 Oct 2024, 16:51
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ChiranjeevSingh AnishPassi KarishmaB
can you please take a stab at Question 2 ( couldn't understand even after going through GMATNinja's explanations) and Question 6 ("value" of investment confused me as it is not ROI) and may be explain in simpler terms?
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The fact that superior service can generate a competitive advantage 17 Oct 2024, 23:05
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Can you let us know what you had trouble with on #2, since a lot of folks have written about it? One quick hint: many folks read "comparable" as "able to be compared," but that's not what it's saying. In this context, "comparable" means similar. So the question is asking how these types of investments are alike. They're alike in what you need to look at when deciding on them. They're not necessarily alike in the actual benefits they produce.
sriharsha4444
ChiranjeevSingh AnishPassi KarishmaB
can you please take a stab at Question 2 ( couldn't understand even after going through GMATNinja's explanations) and Question 6 ("value" of investment confused me as it is not ROI) and may be explain in simpler terms?
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The fact that superior service can generate a competitive advantage 17 Jan 2025, 19:48
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GMATNinja
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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."
The passage says that investments in service, 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, when compare your investment options, you have to look at the tangible benefits of each option.

However, that does NOT imply that the benefits of service investments are just as tangible as investments in production and distribution. For example, investments in service might confer a greater degree of INTANGIBLE benefits than investments in production and distribution. That's nice, but, according to the author, when deciding between different investment types, you have to look at the tangible benefits.

In other words, each option needs to be weighed on the BASIS of tangible benefits, but the tangibility of the benefits of each option might vary. Hence, (C) is a better choice than (A).

Similarly, revenue is an example of a tangible benefit that SHOULD be compared when weighing your options. However, that does not imply that each option will produce comparable increases in revenue. Eliminate (B).

(C) is the best answer.


Quote:
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
The regional bank made an investment in service in order to reduce the time a customer had to wait for a teller. This would certainly result in a measurable change in the customers' experiences, so (B) can be eliminated.

For example, the bank could measure average wait times to see whether those times are reduced after the investment. That might be a nice change for existing customers, but will it attract new ones? According to the passage, the bank did NOT determine whether it would attract new customers either 1) by producing a new standard of service that would excite customers or 2) by proving difficult for competitors to copy.

In other words, the bank managers failed to consider whether the service improvement was an innovation that competing banks could have imitated.

Choice (D) matches the underlined portion and is the best answer.

longhaul123
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 ??
Quote:
Q1 :- The primary purpose of the passage is to

(A) contrast possible outcomes of a type of business investment
(B) suggest more careful evaluation of a type of business investment
(C) illustrate various ways in which a type of business investment could fail to enhance revenues
(D) trace the general problems of a company to a certain type of business investment
(E) criticize the way in which managers tend to analyze the costs and benefits of business investments
Yes, the passage does describe one way that service investments can fail to enhance revenues (by failing to attract new customers). But does the passage illustrate VARIOUS ways in which service investments can fail to enhance revenues?

Also, does the author want you to walk away from this passage thinking, "Ah yes, now I understand several different ways in which service investments can fail to enhance revenues."? That might be PART of the author's argument, but the author wants to warn the reader that service investments don't always work.

The author doesn't think that companies should think, "Hey, let's make a service investment to generate a competitive advantage!" Instead, the author thinks that companies should carefully evaluate service investments before making them, just as they would carefully evaluate production and distribution investments.

The author hopes that, after reading this passage, the reader will think twice (i.e. perform a careful analysis) before making a service investment. Thus, (B) is the best answer.

I hope that helps!
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I just wanted to understand why in Question 1, D is wrong? From the passage I can understand that we are talking about the problems associated with the certain investment type which is Service investment in this context. Also the example of regional bank in 2nd para tells about the problem with Service investment
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The fact that superior service can generate a competitive advantage 17 Jan 2025, 21:25
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Vaishnavi_2498
I just wanted to understand why in Question 1, D is wrong? From the passage I can understand that we are talking about the problems associated with the certain investment type which is Service investment in this context. Also the example of regional bank in 2nd para tells about the problem with Service investment
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Hi Vaishnavi_2498,

I think you've got it. As you mentioned, the bank in the second paragraph is just an example of the more important point the passage is trying to make, which means option D isn't a good fit for a primary purpose question.
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The fact that superior service can generate a competitive advantage 18 Jan 2025, 20:07
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There are two ways to cut D. What we have here is one of them: the bank isn't the point, but rather is just there an an example to illustrate the principle from paragraph one.

The other way to cut this is that it never happens! There's no indication that the bank had any "general problems," such as low profitability, management squabbles, legal investigations, inability to adapt to the marketplace, plagues of locusts, etc. All it says is that the bank invested in wait times and didn't improve its competitive position. So the bank was doing okay before the investment, and it didn't improve things with the investment. But there's no indication of broader problems, and even if there were, we'd need to be told directly that these problems were somehow *caused* by the improvement in service. It's hard to imagine how that's possible, but either way, it is never said.

Broadly, we can often use these two kinds of filters for a question: a) did it happen, and b) does it answer the question? For a point/purpose question, we have to ask whether the answer is supported by the text, but also whether it really describes the overall purpose of the text. On another question, such as an author opinion question, we might have to ask "Is this discussed in the text, and if so, does it reflect the author's opinion or someone else's?" We can do something similar for just about every question type.
AjiteshArun
Vaishnavi_2498
I just wanted to understand why in Question 1, D is wrong? From the passage I can understand that we are talking about the problems associated with the certain investment type which is Service investment in this context. Also the example of regional bank in 2nd para tells about the problem with Service investment
Hi Vaishnavi_2498,

I think you've got it. As you mentioned, the bank in the second paragraph is just an example of the more important point the passage is trying to make, which means option D isn't a good fit for a primary purpose question.
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