Cost control and competitive advantage
Businesses seek to achieve high quality and competitive advantageAn advantage gained over a business' competitors, either by offering lower prices or by offering better products or services that justify a higher price. by developing a business cultureThe attitudes and behaviours of employees within a business. where employees are motivated and care about their customers, the product and/or service, and the business’ reputation.
Quality management is important to businesses because it helps them to produce high-quality products and services. They need to understand what their customers want, and meet customers’ needs and expectations. This is a way of gaining competitive advantage.
Quality management is also important in relation to costs. Mistakes are expensive, and quality controlThe process of inspecting products and services to ensure that what customers receive is of a high standard. and quality assuranceThe process of managing the quality of a product where quality checks take place at several stages during production. help businesses to limit additional costs and reduce wastageLosing or destroying something by using it carelessly or extravagantly. by aiming to ensure that things are done correctly the first time. For example, quality management can help to:
- reduce waste, eg if a car light is damaged during production, it will have to be scrapped and replaced at additional cost to the business
- reduce employee costs, as replacing the car light will cost the manufacturer additional wages, because an employee must be paid to replace the light
When a business can offer higher quality and lower costs, it gains a competitive advantage over similar businesses. A good-quality product or service helps to build a strong brand imageHow a business or product is perceived by others, including consumers., which can allow a business to grow its market shareThe percentage of a market taken by a particular business or product.. If a business has a product or service that gains a good reputation for being of high quality, the business can charge a premium price.
