Key Competitiveness Factors: Innovation, Cost, and Quality

Posted on Mar 23, 2025 in Business Administration and Management (BAM)

Key Competitiveness Factors

To achieve a competitive edge, companies must focus on several key factors:

1. Innovation

Innovation is the ability to create new products or significantly modify existing ones. This allows a company to offer unique or improved products, increasing its chances of gaining market share.

2. Cost

Reducing costs across all aspects of manufacturing, sales, and service delivery is crucial. Lower costs enable companies to reduce prices, boosting sales and increasing profits.

3. Quality

Quality is the ability to consistently meet customer needs and expectations. This leads to greater market acceptance, increased trust, and a larger market share. Quality has become increasingly important due to:

  • Excess Supply: Consumers have more choices when there is a greater supply of competing products.
  • Market Maturity: As products mature, sales growth slows, and competition intensifies. Quality differentiates a product and expands market share.
  • Market Liberalization: New competitors entering the market require existing players to maintain a privileged position through superior quality.
  • Changing Consumer Habits: Consumers increasingly demand higher quality products and services.

Attributes of a Good or Service

The attributes of a good or service can be broken down into:

  • Features of a Good: The needs of the purchaser or consumer that are satisfied (e.g., speed, comfort, safety).
  • Characteristics of the Good: The specific specifications that give rise to its features (e.g., seat dimensions, number of staff, timeliness).

Quality Defined

Quality is a set of properties or attributes objectively or subjectively attributed to a product or service by customers.

Tools to Ensure Quality Service

  1. Identifying Customer Needs: Meeting customer needs is the foundation of quality. Products or services that do not meet expectations will not be valued or purchased.
  2. Regular Satisfaction of Needs: Once customer needs are identified, the company must consistently produce products or provide services that meet those needs.
  3. Obtaining Products and Services at Minimum Cost: Costs are associated with the organization, media, and technology used. Operations should be performed to avoid costs associated with poor product quality.

Factors Influencing a Company’s Ability to Produce Quality Products or Services

A company’s ability to produce quality products or services depends on:

  1. Work Systems: Technology applied to materials, work organization, reliability of manufacturing processes, and inspection and control methods.
  2. People in the Organization: The level of training, professionalism, and involvement of individuals in achieving quality in all tasks.