The aspect of quality management varies in accordance to the business industry context, with the main objective that extends beyond ensuring good quality to incorporate consistency in product development. Quality management is based on four concepts that revolve around planning, controlling, assurance, and improvement of quality. It also emphasizes how an organization can achieve consistent quality in the process of product development (Alkhafaji, p. 158). Quality management has varying effects depending on the scope of the business organizations and the business level strategies that an organization uses. This paper researches the effects of quality management on domestic and global competition by comparing the competing organizations in the airline industry in both the domestic and global markets. The paper describes a process that is similar to both organizations, Southwest Airlines and Lufthansa, and explains why the process procedure produces a competitive product or service in the domestic and global markets. In addition, the paper discusses how quality management affects the position of the selected companies in the domestic and global markets.
The process that is similar to both Lufthansa and Southwest Airlines
Customer focus is an important strategy in the airline business, and different companies deploy different quality management approaches to ensure top-notch customer satisfaction according to their scope of operations and their target clientele. Customer focus is a core aspect of quality management that both Lufthansa and Southwest Airlines take into account during the development of their business-level strategies (Goetsch and Davis, p. 189). Southwest Airlines operates on a domestic market while Lufthansa operates on a global platform. The only difference is that pricing plays an important role in the quality of management of the two airline companies. Customer focus at the airline companies is based on the pricing, with the Southwest Airlines being a low-cost airline in the domestic market, while Lufthansa is a luxury airline in the global market. Both organizations rely on their customers for business profitability, they have to take into consideration the present and future customer requirements, deploy strategies to meet them, and go beyond their customer expectations (Hoyle, p. 100). Both global and domestic companies achieve customer focus when all the employees within the organization know both internal and external clients, and that their requirements have to be realized with the principal objective of guaranteeing customer satisfaction within the airline business.
How customer focus produces a competitive product or service in the domestic and global markets
The low-cost strategy deployed by Southwest Airlines emphasizes operating at lower costs and offering low prices in the domestic market. An organization that aims at the realization of the low-cost strategy should focus on the use of resources that play an integral role in fostering its efficiency (Goetsch and Davis, p. 89). The underlying principle is that an organization that has successfully implemented the low-cost strategy can have the lowest costs in comparison to its competitors in the domestic market. Therefore, Southwest Airlines exploit such a position to reduce its prices to increase its market share or maintain the current prices and increase its revenue per unit items compared to its competitors. The principal idea of the low-cost strategy/low-cost airlines is that cost and prices are not dependent, and the strategy puts a lot more on costs to achieve a status that it can use to foster competitive advantage or use lower costs to increase its profitability. Lufthansa uses a differentiation strategy that is based on offering luxury airline services, which puts more emphasis on the development of a distinctive product/service or the development of a perception of a distinctive product that consumers are keener to compensate a premium for it. If a business enterprise is not getting a premium pay for its products or services, then it has not effectively implemented differentiation (Hoyle, p. 147).
How quality management affects the position of the companies in the domestic and global market
The business advantages of quality management mainly center on cost reduction, profitability, and quality product development; all of these are vital in positioning the firm at the local and global market by the scope of the business. Effective implementation of quality management results in product/service differentiation that enhances the responsiveness from their customers, quality product development, and innovation, which are core elements of Lufthansa’s business-level strategy at the global market (Goldsmith and Hu-Chan, p. 147). It is important to take into account that costs are a vital issue of concern during product differentiation because the costs associated with unique product development may turn out to be higher compared to the premium amount that the clients are willing to pay for it. The principal argument under the differentiation strategy is that the customer should be willing to pay a premium for a given product.
- Alkhafaji, Abbass. Strategic management: formulation, implementation, and control in a dynamic environment. London: Routledge, 2003.
- Goetsch, David and Stanley Davis. Quality Management for Organizational Excellence: Introduction to Total Quality. Upper Saddle River, New Jersey: Pearson Prentice Hall, 2006.
- Goldsmith, M and M Hu-Chan. Global leadership: the next generation. New York: Pearson education Inc, 2003.
- Hoyle, David. Quality: Management Essentials. New York: Butterworth-Heinemann, 2007.