Compare or Contrast Public and Private Companies
In today’s highly commercial world, one of the key objectives of starting a business is to make profit. While this might be true and important to every business, “most people believe that a business should not focus solely on profitability, but on the quality of products and services it offers to its customers”. This essay will discuss the various perspectives on the topic and will to a large extent agree with the view that businesses should not just focus on profit, by looking at customer desire for high quality product and their willingness to pay, then highlighting how focus on quality can lead to lower cost of product and profitability; as well as how quality influence organisation to be socially responsible, sustainable and profitable.
First, a strong reason to concentrate on improving quality of product or services of an organisation is the fact that customers desires high quality good, and are willing to pay for value added. This was corroborated by (Nagar and Rajan 2001), who found out that “poor product quality reduces customer goodwill and loyalty which in turn affects future revenues as dissatisfied customers take their business elsewhere or pay less for the firm’s product.” Such a product and the firm producing it acquire a bad reputation since poor product quality leaves a lasting impression on the consumer who perceives it as a low quality brand. In order for a product to be a perceived as a premium brand, a firm must continually improve on the quality of its products or services. A satisfied customer base lead to good brand perception and will open the door to numerous repeated purchases and referrals which will in turn help the firm to grow its market share, become more competitiveness and increase its profitability.
Focusing on quality significantly lowers cost of production at long run. Operations Management (Russell and Taylor, 2000) explains that, manufacturing of products to a high quality standard through implementation of quality
First, a strong reason to concentrate on improving quality of product or services of an organisation is the fact that customers desires high quality good, and are willing to pay for value added. This was corroborated by (Nagar and Rajan 2001), who found out that “poor product quality reduces customer goodwill and loyalty which in turn affects future revenues as dissatisfied customers take their business elsewhere or pay less for the firm’s product.” Such a product and the firm producing it acquire a bad reputation since poor product quality leaves a lasting impression on the consumer who perceives it as a low quality brand. In order for a product to be a perceived as a premium brand, a firm must continually improve on the quality of its products or services. A satisfied customer base lead to good brand perception and will open the door to numerous repeated purchases and referrals which will in turn help the firm to grow its market share, become more competitiveness and increase its profitability.
Focusing on quality significantly lowers cost of production at long run. Operations Management (Russell and Taylor, 2000) explains that, manufacturing of products to a high quality standard through implementation of quality