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PAL is a group specialising in loans for home purchase. It has a network of shops, cash machine and other outlets in and around the capital city (where it has its headquarters) with all outlets within seventy miles. It monitors interest rates offered by competitors and strives to match or better the lowest rates. This strategy has been successful, but in order to compete more fully, it has introduced a range of customer services, including home insurance. A dedicated unit was established to extend existing benchmarking of price to other aspect of customer requirement. Following a survey, the following factors in addition to price have emerged as being relevant to customers. Delivery. Technical content of literature. Customer service and correspondence. (a) Discuss the use of appropriate performance measures which home insurance could use as part of the proposed competitor benchmarking exercise. For each measure, advice on ways in which subjectivity might be dealt with. (b) Analyse the strategy followed by PAL so far and evaluate the possible effects of actions arising from benchmarking in supporting these strategies.

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