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. Invest- ments in service, like those in production and distribution, (5) 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 (10) 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 (15) 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 (20) determine whether it would attract new customers by pro- ducing a new standard of service that would excite cus- tomers or by proving difficult for competitors to copy. The only merit of the improvement was that it could easily be described to customers.

　　1. 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

　2. 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