| Line | 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, | |
| (5) | 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 | |
| (10) | 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 | |
| (15) | 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 | |
| (20) | 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 | |
| (25) | 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. |
The discussion of the regional bank in the second paragraph serves which of the following functions within the passage as a whole?