The Importance of Quality (Edexcel IGCSE Business)

Revision Note

Lisa Eades

Written by: Lisa Eades

Reviewed by: Steve Vorster

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 

  • 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

Examiner Tips and Tricks

‘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

Approaches to Managing Quality

Quality Control

  • Quality control is a traditional method of checking quality at the end of the production process using quality inspectors to find faults

  • It is not possible to achieve perfection in every production process

    • E.g. There will always be some variation in terms of materials used, production skills applied, reliability of the finished product

Benefits & Drawbacks of Quality Control

Benefits 

Drawbacks

  • Specialists in quality control check standards
     

  • Output is very likely to be fit for purpose before the customer receives it
     

  • Little staff training is needed as inspectors check quality rather than the employees themselves

  • Rejecting finished goods is a significant waste of resources
     

  • The cause of defects is ignored so problems may continue
     

  • High costs of scrapping or reworking products

Total Quality Management (TQM)

  • Total quality management is a whole-business approach to ensuring quality, with the aim of eliminating problems before they occur

  • All employees are involved in ensuring quality is achieved in every business process

  • Inefficiency and wastage is removed from every business activity or function - including those that are not directly related to production

  • Features of TQM include

    • Teamwork as a key way to solve problems

    • Zero defects, the business culture of ‘getting it right first time’

    • Ongoing monitoring of quality standards using statistical techniques

    • A focus on meeting changing customer needs

    • Committed workers who receive ongoing training

Advantages & Disadvantages of TQM

Advantages

Disadvantages

  • Quality in all aspects of the business improves efficiency which should lead to improved profitability

  • A positive culture of constant improvement and high standards exists throughout the business

  • Recruitment must be managed well to appoint workers who are committed and willing to engage in significant continued training

  • Careful monitoring and control is required by managers capable of setting a good example

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Lisa Eades

Author: Lisa Eades

Expertise: Business Content Creator

Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.

Steve Vorster

Author: Steve Vorster

Expertise: Economics & Business Subject Lead

Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.