GMAT Question of the Day: Daily via email | Daily via Instagram New to GMAT Club? Watch this Video

It is currently 30 May 2020, 22:36

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

The fact that superior service can generate a competitive advantage fo

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

Find Similar Topics 
CEO
CEO
User avatar
V
Joined: 15 Jul 2015
Posts: 3274
Location: India
GMAT 1: 780 Q50 V51
GRE 1: Q170 V169
Re: The fact that superior service can generate a competitive advantage fo  [#permalink]

Show Tags

New post 27 Jul 2019, 02:03
1
bawatwr wrote:
In question no. 6 the OA says - emphasize the relatively low value of the investment in service improvement. As passage no where quantify the amount of the investment that is done by banks. So the wording relatively low value of the investment makes little sense, it would be good if it would have stated as low value of return from investment,that makes more sense. Moreover no options in this question suffice for answer other than this, but it it also flawed. So what we are guessing we should mark best of the worst ??
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".
_________________
Intern
Intern
User avatar
B
Joined: 06 Dec 2016
Posts: 26
Location: India
Concentration: Technology, Sustainability
WE: Engineering (Energy and Utilities)
Re: The fact that superior service can generate a competitive advantage fo  [#permalink]

Show Tags

New post 27 Jul 2019, 10:31
joshnsit wrote:
For Q 3, first of all tell what is the answer, and then explain where in passage specifically should I go to search out the answer?
For Q 4, please explain why not B?


For Q3,

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.
_________________
War with the clock!
Senior Manager
Senior Manager
User avatar
P
Joined: 10 Sep 2013
Posts: 347
Location: India
Schools: Sloan '22, UVA Darden
GMAT 1: 720 Q50 V38
GPA: 4
Re: The fact that superior service can generate a competitive advantage fo  [#permalink]

Show Tags

New post 02 Aug 2019, 11:07
Hi GMATNinja

In question 4,

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.

I seriously dont understand what this statement is trying to convey. By proving is parallel to by producing and hence, what I am inferring here is that, bank failed to determine whether it would attract new customers --> by producing new standard of service. And bank also failed to determine whether it would attract new customers by proving difficult for competitors to copy. Bank isnt proving difficult. The new standards should be difficult. I couldnt even grasp what the sentence is trying to convey and ended up eliminating all 5 options. Scary. Is that bad parallelism here? Or am I supposed to infer such meanings in RC?

Further, If bank failed to considered whether new standards will bring more customers by having standards difficult to copy, what i infer here is that bank failed to consider whether it will have new customers or not. Not the failure of considering how difficult it is for others to copy. WE really dont care how difficult it is for other banks to copy those standards. And we have no reason to believe that even in the case of no difficult, whether banks will invest some amount to keep up. Its a leap of faith.

I am an avid reader and yet, I got stuck in here without any direction. PLease help.
GMAT Club Verbal Expert
User avatar
V
Status: GMAT and GRE tutors
Joined: 13 Aug 2009
Posts: 3428
Location: United States (CO)
GMAT 1: 780 Q51 V46
GMAT 2: 800 Q51 V51
GRE 1: Q170 V170

GRE 2: Q170 V170
Re: The fact that superior service can generate a competitive advantage fo  [#permalink]

Show Tags

New post 10 Aug 2019, 08:02
1
darshak1 wrote:
Hi [url=https://gmatclub.com:443/forum/memberlist.php?mode=viewprofile&un=GMATNinja]GMATNinja

In question 4,

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.

I seriously dont understand what this statement is trying to convey. By proving is parallel to by producing and hence, what I am inferring here is that, bank failed to determine whether it would attract new customers --> by producing new standard of service. And bank also failed to determine whether it would attract new customers by proving difficult for competitors to copy. Bank isnt proving difficult. The new standards should be difficult. I couldnt even grasp what the sentence is trying to convey and ended up eliminating all 5 options. Scary. Is that bad parallelism here? Or am I supposed to infer such meanings in RC?

Further, If bank failed to considered whether new standards will bring more customers by having standards difficult to copy, what i infer here is that bank failed to consider whether it will have new customers or not. Not the failure of considering how difficult it is for others to copy. WE really dont care how difficult it is for other banks to copy those standards. And we have no reason to believe that even in the case of no difficult, whether banks will invest some amount to keep up. Its a leap of faith.

I am an avid reader and yet, I got stuck in here without any direction. PLease help.

Take another look at the full sentence:
Quote:
Nor did [the bank managers] 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.

Here, "it" refers to "service improvement," NOT to banks or bank managers (you can tell because "it" needs to refer back to something singular, and "service improvement" is the only singular noun available).

With that understanding, here is how the parallelism shakes out:

Bank managers failed to analyze whether their service improvement would attract new customers by:
  • producing a new standard of service that would excite customers; OR by
  • proving difficult for competitors to copy.

The second parallel piece does require a small inference to understand: the service improvement could attract new customers IF it proved difficult for competitors to copy, because it would give the bank an advantage over its competitors.

However, the question makes our life easy. We do not need to figure out WHY a certain piece of information is important. We simply need to determine which answer choice is something that bank managers failed to consider when implementing the service improvement.

(D) is the only answer choice that does this. Can you think of a different answer choice (such as "whether [the bank] will have new customers," as you suggested)? Sure. But that is not one of the options in front of us, so it cannot be the correct answer. The managers failed to consider whether the service improvement "was an innovation that competing banks could have imitated," so (D) is the correct answer to question #4.

I hope that helps!
_________________
GMAT/GRE tutors @ www.gmatninja.com (we're hiring!) | GMAT Club Verbal Expert | YouTube | Blog | Bad at PMs

Beginners' guides to GMAT verbal: RC | CR | SC

YouTube LIVE verbal webinars: all videos by topic

SC articles & resources: How to go from great (760) to incredible (780) on GMAT SC | That "-ing" Word Probably Isn't a Verb | That "-ed" Word Might Not Be a Verb, Either | No-BS Guide to GMAT Idioms | "Being" is not the enemy | WTF is "that" doing in my sentence?

RC, CR, and other articles & resources: All GMAT Ninja articles on GMAT Club | Using LSAT for GMAT CR & RC |7 reasons why your actual GMAT scores don't match your practice test scores | How to get 4 additional "fake" GMAT Prep tests for $29.99 | Time management on verbal

SC & CR Questions of the Day (QOTDs), featuring expert explanations: All QOTDs | Subscribe via email | RSS

Need an expert reply? Hit the request verbal experts' reply button; be specific about your question, and tag @GMATNinja. Priority is always given to official GMAT questions.
Manager
Manager
avatar
B
Joined: 09 Nov 2018
Posts: 93
Schools: ISB '21 (A)
Re: The fact that superior service can generate a competitive advantage fo  [#permalink]

Show Tags

New post 03 Oct 2019, 08:23
1
vksunder wrote:
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. 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. If a company is already effectively on a par with its competitors because it provides service that avoids a damaging reputation and keeps customers from leaving at an unacceptable rate, then investment in higher service levels may be wasted, since service is a deciding factor for customers only in extreme situations.

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. The bank managers did not recognize the level of customer inertia in the consumer banking industry that arises from the inconvenience of switching banks. 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. The only merit of the improvement was that it could easily be described to customers.
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



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
(D) insufficient analysis that managers devote to them
(E) degree of competitive advantage that they are likely to provide



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
(B) It threatened to weaken the bank’s competitive position with respect to other regional banks
(C) It had already been improved after having caused damage to the bank’s reputation in the past.
(D) It was slightly superior to that of the bank’s regional competitors.
(E) It needed to be improved to attain parity with the service provided by competing banks.



Q4. The passage suggests that bank managers failed to consider whether or not the service improvement mentioned in lines 19

[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.]

(A) was too complicated to be easily described to prospective customers
(B) made a measurable change in the experiences of customers in the bank’s offices
(C) could be sustained if the number of customers increased significantly
(D) was an innovation that competing banks could have imitated
(E) was adequate to bring the bank’s general level of service to a level that was comparable with that of its competitors



Q5. The discussion of the regional bank (line 13-24) serves which of the following functions within the passage as a whole?

(A) It describes an exceptional case in which investment in service actually failed to produce a competitive advantage.
(B) It illustrates the pitfalls of choosing to invest in service at a time when investment is needed more urgently in another area.
(C) It demonstrates the kind of analysis that managers apply when they choose one kind of service investment over another
(D) It supports the argument that investments in certain aspects of service are more advantageous than investments in other aspects of service.
(E) It provides an example of the point about investment in service made in the first paragraph.



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





The Official Guide for GMAT Review, 10th Edition, 2003

Practice Question
Question No.: RC 225 ~ 230
Page: 390


Here are the OG explanations for the questions :)

79. 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
Main idea
Look at the passage as a whole to find the primary purpose. This passage uses an example, described in the
second paragraph, to illustrate the principle of business practice explained in the first paragraph. The author
begins by saying that efforts to improve service do not always result in a competitive advantage for a company.
Thus, an investment in service must be carefully evaluated to determine if it will reduce costs or increase
revenues (lines 4–8).
A Only one outcome, failure to gain a competitive advantage, is examined.
B Correct. Investments in service must be carefully evaluated for the returns they will bring.
C Only one way, an unnecessary investment in improved service, is discussed.
D The example of the bank is used only to illustrate a general business principle; the bank itself is not the
focus of the passage.
E The passage criticizes the absence of such an analysis, not the way it is conducted.
The correct answer is B.
80. 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
Supporting ideas
The phrase according to the passage indicates that the question covers material that is explicitly stated in the
passage. The answer to this question demands a careful reading of the second sentence (lines 4–8). Investments in
service are like investments in production and distribution because they must be balanced against other types of
investments on the basis of direct, tangible benefits. Thus, these investments should be weighed on the same
basis.
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 revenues generated from
investing in production and distribution.
C Correct. An evaluation of whether or not to make these investments must be made on the same basis.
D How managers analyze investments in production and distribution is not discussed.
E The competitive advantage of superior service is acknowledged, but not the degree of it; it is not
mentioned at all in the context of production and distribution.
The correct answer is C.
81. 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.
(B) It threatened to weaken the bank's competitive position with respect to other regional banks.
(C) It had already been improved after having caused damage to the bank's reputation in the past.
(D) It was slightly superior to that of the bank's regional competitors.
(E) It needed to be improved to attain parity with the service provided by competing banks.
Inference
Because the question uses the word suggests, finding the answer depends on making an inference about service at
the bank. The paragraph that discusses the bank begins with the transitional expression, this truth, which refers to
the previous sentence (lines 8–15). The truth is that investing in improved service is a waste if a company is
already effectively on a par with its competitors because it provides service that avoids a damaging reputation
and keeps customers from leaving at an unacceptable rate. Because of the way the author has linked this
generalization to the description of the bank after investment, it is reasonable to infer that the hypothetical
company's situation describes the bank prior to its investment in improved service.
A Correct. The bank's service would have been good enough to avoid a damaging reputation and to retain
customers at an acceptable rate.
B The passage does not suggest that the bank's service was either poor or deficient to that of its competitors.
C The passage implies that the bank's service avoided a damaging reputation.
D The bank would have been on a par with its competitors, not superior to them.
E The bank would have been on a par with its competitors, not inferior to them.
The correct answer is A.
82. The passage suggests that bank managers failed to consider whether or not the service improvement mentioned in lines
18–20
(A) was too complicated to be easily described to prospective customers
(B) made a measurable change in the experiences of customers in the bank's offices
(C) could be sustained if the number of customers increased significantly
(D) was an innovation that competing banks could have imitated
(E) was adequate to bring the bank's general level of service to a level that was comparable with that of its
competitors
Inference
The question's use of the word suggests means that the answer depends on making an inference. To answer this
question, look at the entire second paragraph. Managers failed to think ahead. Would the service improvement
attract new customers because other banks would find it difficult to copy? Or would the service improvement be
easily imitated by competitors? The managers should have investigated this area before investing in improved
service.
A The passage states the improvement could easily be described to customers (lines 28–29).
B No evidence in the passage shows that the managers failed to think about their customers' experience in the
bank.
C The passage does not imply that managers failed to consider an increase in clients.
D Correct. The managers did not wonder if other banks would copy their service improvement.
E Lines 8–12 imply that the bank enjoyed a comparable level of service before investing in service
improvement.
The correct answer is D.
83. The discussion of the regional bank in the second paragraph serves which of the following functions within the
passage as a whole?
(A) It describes an exceptional case in which investment in service actually failed to produce a competitive
advantage.
(B) It illustrates the pitfalls of choosing to invest in service at a time when investment is needed more
urgently in another area.
(C) It demonstrates the kind of analysis that managers apply when they choose one kind of service investment
over another.
(D) It supports the argument that investments in certain aspects of service are more advantageous than
investments in other aspects of service.
(E) It provides an example of the point about investment in service made in the first paragraph.
Logical structure
This question requires thinking about what the second paragraph contributes to the whole passage. The first
paragraph makes a generalization about investing in improvements in service; in certain conditions, such
improvements do not result in the competitive advantage a company hopes for. The second paragraph offers the
bank as an example of this generalization.
A The first sentence of the passage explains that improving service does not necessarily bring a competitive
advantage, so the bank is not exceptional.
B The bank illustrates the pitfall of not evaluating a service improvement on the basis of tangible benefits;
other areas of the bank are not mentioned.
C The passage does not discuss how managers analyze and choose different service investments.
D Investments in different aspects of service are not evaluated in the passage.
E Correct. The bank is an example of the position stated in the first paragraph that investing in improved
service can be a waste if the investment is not evaluated carefully.
The correct answer is E.
84. The author uses the word "only" in line 27 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
Logical structure
The question asks you to consider the logic of the author's word choice. The previous two sentences discuss why
the service improvement was a wasted investment. In contrast, the final sentence turns to the sole advantage of the
service improvement, which is trivial by comparison. The author uses only to modify merit in order to emphasize
the minimal nature of this advantage.
A The passage does not indicate that the service improvement is somehow strange or peculiar.
B Correct. Only emphasizes the low value attached to the single benefit.
C No attributes of the service improvement are mentioned.
D Only signifies that there was one sole merit of the service improvement.
E The duration of the benefit is not discussed in the passage.
The correct answer is B.
Manager
Manager
avatar
B
Joined: 11 Aug 2019
Posts: 85
Re: The fact that superior service can generate a competitive advantage fo  [#permalink]

Show Tags

New post 04 Feb 2020, 12:23
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!
CrackVerbal Representative
User avatar
S
Joined: 01 Mar 2019
Posts: 215
Re: The fact that superior service can generate a competitive advantage fo  [#permalink]

Show Tags

New post 05 Feb 2020, 05:01
shabuzen102 wrote:
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

The "improvement in competitive position" is the ultimate objective of all the steps which are considered in this context. Investing in service improvements is also one of these steps aimed at improving the company's (in this case, the regional bank's) competitive position. This is identified very early on in the passage, when it states:

"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."

Therefore, when option (B) states "...when investment is needed more urgently in another area", it is pointing to investment needed in an area different from customer service, which too is aimed at improving the bank's competitive position, and not investment in "improving the bank's competitive position" as an area distinct from customer service. This option is incorrect because the passage never talks about any areas other than customer service, so we cannot be sure that investment in another area was urgently required.

Hope this helps.
_________________
Manager
Manager
avatar
B
Joined: 11 Aug 2019
Posts: 85
Re: The fact that superior service can generate a competitive advantage fo  [#permalink]

Show Tags

New post 05 Feb 2020, 06:43
svasan05 wrote:
shabuzen102 wrote:
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

The "improvement in competitive position" is the ultimate objective of all the steps which are considered in this context. Investing in service improvements is also one of these steps aimed at improving the company's (in this case, the regional bank's) competitive position. This is identified very early on in the passage, when it states:

"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."

Therefore, when option (B) states "...when investment is needed more urgently in another area", it is pointing to investment needed in an area different from customer service, which too is aimed at improving the bank's competitive position, and not investment in "improving the bank's competitive position" as an area distinct from customer service. This option is incorrect because the passage never talks about any areas other than customer service, so we cannot be sure that investment in another area was urgently required.

Hope this helps.


Thank you so much! This is such a good and insightful answer!! So the competitive position is the umbrella that also covers customer services and other areas. I thought it was parallel to/ on the same level with customer service, but it turns out it's one level up.
GMAT Club Bot
Re: The fact that superior service can generate a competitive advantage fo   [#permalink] 05 Feb 2020, 06:43

Go to page   Previous    1   2   3   [ 48 posts ] 

The fact that superior service can generate a competitive advantage fo

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  





Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne