Good Example Of Essay On Economic Consequences Of Poor Quality
Quality is an economic category that shows the combination of item’s properties that determine its sustainability to meet the specific needs according to its purpose. It is one of the fundamental characteristics of the good which decisively influences the consumer’s demand and competitiveness of the good and specifically the company which produces it.
Poor quality of goods and services provided on the market may lead to loss a crash of the company. Since the company’s image on the market is influenced by the consumer’s response (reaction) to the unsatisfying or defective goods and services it provides, the lack of adequate attention to the quality of goods may damage the company’s reputation and reduce its share on the market.
Over the past two years the Rank Xerox Corporation lost a great share of its consumers and 5500 of 140000 units of the production equipment of the company stopped operation. The reason of such significant loss was the low quality of some items produced on broken equipment. The consequences of this occasion were tremendous. There occurred a loss in human and material resources spent on production of defective products, storage and transportation. The company lost money on importing goods an in addition it didn’t get the sufficient revenue because of the little share on the market. Together with it the prestige of goods has declined and the workers have spent additional time to eliminate the manufacture defects. Taking into account also the losses from missed opportunities, it is clear that the company suffered a severe blow.
Quality, in its essence, is a way of management. Total quality control across the organization, as the main task of senior management involves the management and technical staff in activities to improve quality in the interests of the client. In the same work involved marketing services, engineering services, manufacturing, service branch relations, finance and service, as well as the service itself is quality control on the most cost-effective levels that ensure customer satisfaction.
Objects planning product quality are ultimately a variety of activities and indicators that reflect both the individual properties of products and a variety of system performance and quality management processes. These figures are reflected in the specific tasks to improve the quality of products, plans to research and development activities, standardization and metrology software, the implementation of quality management systems, the technical development of the enterprise, training.
Another example of consequences of poor quality of goods and services is low power quality supplied to users of electricity networks. The customers complained when the operation of devices at his installation is interrupted leading to techno-economic inconveniences. Due to distortion of voltage the customers’ devices connected to the network faced with some troubles in operation (such as extra heating, early aging of devices, disoperation, etc.). This example shows that because of absence of other market competitors the loss of business is impossible. In its turn, this situation causes strengthening of governmental and state institution control over either the activities of the enterprise or developing standards due to which the services or goods must be produced and provided on the market.
The quality of products is one of the most important indicators of enterprises of all forms of ownership.
For the enterprise in market conditions constant production of quality products means a lot. First of all is the formation of the company's image.
The image of a high-level - is well known and popular, sustainable positive attitude of buyers to the company, its products, services and attributes of corporate identity - the trademark, advertising media and others. Under the conditions of the market and competition, if the firm has a high quality product, stable demand, it has everything, and vice versa.
Thus, the solution to the problem of product quality in the enterprise - a good image among customers, this output is not only the domestic but also in foreign markets, is the basis for maximum profit and stable financial situation of the company.
Ippolito, Richard A. “Consumer Reaction to Measures of Poor Quality: Evidence from the Mutual Fund Industry.” Journal of Law and Economics Vol. 35.No. 1 (Apr., 1992): pp. 45-70. Print.
Sharmistha Bhattacharyya, Sjef Cobben. “Consequences of Poor Power Quality.” In Tech. (April., 2011). ISBN: 978-953-307-180-0.