Quality & Competitive Advantage
- Quality considers the characteristics and features of a product that satisfy the needs of customers
- Customers may consider products or services to be of good quality if they
- Look good and are sold by a reputable business or brand
- Are reliable and durable
- Are safe and fit for purpose
- Receive good customer service, including after-sales service
- The quality of a businesses products can provide a competitive advantage
- Attract and retain loyal customers
- High quality and minimal defects lowers business costs allowing lower selling prices to better compete with rivals
- Better quality reduces wastage and returns from unsatisfied customers
- Build the reputation of the business or brand
- High quality can be used in promotional activity and provide a unique selling point for businesses in competitive markets
- Successfully developing a USP for quality can improve business reputation and ease expansion into new markets
- Attract and retain loyal customers
- If quality is not maintained then businesses may be at risk of
- Losing their competitive advantage and customers to other brands who offer better quality goods/services
- Experiencing higher costs due to having to replace faulty or defected goods
- Gaining a poor reputation as customers spread poor reviews about the business to others
- In some countries laws protect consumers so businesses need to ensure that the products it sells are free of faults or defects to avoid harming customers or their reputation
Exam Tip
‘Quality’ does not necessarily mean producing a high-priced, excellent product
How quality is defined depends upon the industry in which the business operates, the product and price. It will also be the subjective opinion of customers
For example, if you buy a low-priced remote controlled toy drone would you expect it to work as well as an expensive toy drone. The answer will probably be based on your expectations of quality and price, but you would want it to work and be free of faults