Total Quality Management as a Competitive Advantage

Total Quality Management (TQM) is a paradigm used in business and organizational management in ensuring that the quality of products and services are appealing to customers. TQM is a business management tool that is being embraced by many business firms as they work on improving their competitive advantage. Service and product quality are one way through which companies attain and maintain customers. Thus, total quality management is a basis on which firms are increasing their competitiveness. Total quality management bases on several principles. These principles are customer satisfaction, continuous improvement, employee involvement, and long-term patterns of healthy relations between the firm and its suppliers (Watson, 2012).

Total quality management impacts positively on the financial performance of firms. In recent times, there have been arguments by several gurus in management claiming that TQM does not have a significant impact on financial performance.

However, research has ascertained that TQM has a significant impact on the financial performance of firms. Among the arguments opposing the relevance of TQM on financial performance, is the subject that TQM is extremely expensive to maintain total quality programs in firms. This was evident when firms began applying this paradigm. For the last ten years, companies have started to realize the benefits of total quality management.

With effective total quality management programs and the implementation of the programs, payoffs on financial performance are being recorded. Research shows that most firms that have well established and functioning total quality management programs are recording profits. The profits of the general activity of TQM are being replicated in the financial outcomes of firms. It is when firms can implement TQM that they can realize improvement or better outcomes in financial performance (Watson, 2012).

Total quality management is implemented differently. Different total standardization certifications have been set by the International Standards Organization. All the codes aim at meeting quality standards of products and services being produced by the firms applying the code of standards. Total quality management helps in creating awareness about product quality on the side of the employees. The organizational employees should be fully informed about the specification and expectations of quality in products. Total quality management involves the focus on organizational employees through training them on how to achieve quality in goods and services (Watson, 2012).

Total quality management is a quality enhancement tool in the organization. Therefore, TQM raises the quality of the products or services of a company. All aspects of quality management are centered on improving processes that are used in the production and delivery of products and services to customers. The increase in the quality of products and organizational services has many benefits to the organization.

It leads to a reduction in the number of nonconforming which by effects reduces the complaints from customers. This bolsters the rate of customer satisfaction. Customers will often feel satisfied with the firm when the products or services they are receiving are of satisfactory quality and are meeting their expectations. A rise in the quality of products due to improved quality often culminates in the risen demand for the products (Moccia, n.d).

With increased competition by different companies in the economy, companies use different methods in making their products or services unique in the market. Companies use distribution as a means of differentiating their products and services in the market. Different methods of distribution are used by companies’ for instance online distribution, showrooms, direct distribution (Ma, 1999).

Product market segmentation is another method used in differentiating the products and services of companies. Some companies would prefer to focus on a smaller segment of their larger market. The companies specialize and fully exploit the market segment they have chosen. Customer services are also a focus of many companies as they work towards ensuring that they have attained uniqueness in the market. Companies get to be identified by their customers in the market by offering superior services to their customers (Bacon and Pugh, 2003).

Product and service differentiation can be attained through branding. Apart from fulfilling aspects of qualities, companies are struggling to turn their products into recognizable brands. Brand recognition adds value to the product in the eyes of customers. Other strategies used in product differentiation are pricing, market size, and dominance strategies and also through behaviors (Ma, 1999).

The product differentiation strategies being used by companies have proven to be effective in increasing the competitive advantage of many companies in the market. Distribution strategies have helped companies dealing with similar products such as Amazon. There are many bookselling and advertising companies, but because of the online system of differentiation, Amazon has attained high competitiveness over other companies that are using traditional methods in distributing the products (Ma, 1999).

Branding has also helped many companies in beating the competition from their competitors. Branding makes customers be attached to the products of the company which ties them to the products. Many large companies have used their names as brands (Ma, 1999).

Market segmentation helps to create a specialty in a given line of products. This has helped companies like Starbucks. Starbucks, which operates in the restaurant business, chose to specialize in preparing and selling coffee and has thus been known to offer high quality and varieties of coffee (Bacon and Pugh, 2003).

Pricing also plays a vital part in the differentiation of products. Some companies choose to minimize their profits by setting a slightly lower price on their products. They are identified by the lower prices of their products hence end up making significant sales by that virtue (Bacon and Pugh, 2003).


Bacon, T. R. & Pugh, D. G. (2003). Winning behavior: What the smartest, most successful companies do differently. New York, NY [u.a.: AMACOM.

Ma, H. (1999). Creation and preemption for competitive advantage. Management Decision, 37(3), 259 – 267.

Moccia, S. (n.d). The Role of Personal Values in an Advanced Perspective of Total Quality Management. Web.

Watson, G. H. (2012). A Comprehensive Approach to Quality Aims at Inclusive Growth’, Journal for Quality & Participation. 34(4), 16-20.

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