By John Muchiri
mwasj.jm@gmail.com entrepreneurbridge@gmail.com
B.Com (Finance)
Kenyatta University
Faced with fierce competition and the need to increase profitability, an entepreneur may be tempted to cut on production costs. Reducing production costs is a delicate hassle as he must balance between desire to boost revenue and protecting the value customers get from his products/ services.
The predominant view among most entrepreneurs is that high quality is associated with high production costs. There is a link between increase in quality and decrease in costs of production. In fact, it reduced total costs by driving down the costs for repairs and control.
The term quality in a business sense means 'fitness for purpose'. The product/ service the business is offering should be able to meet the expectations of a customer. It is important to note that quality is based on perception when it comes to services.
Focusing on improving the level of quality(value) offered by a business is an important strategy of increasing profitability. The aim here is to improve customer satisfaction by reducing wastes.
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