Cost Quality Trade Off

The 'cost versus quality' or C-Q trade-off refers to the trade-off between the price point and the quality of a product or service. It is therefore one of the most critical decisions made by a firm, as it impacts on a number of key business drivers, including the brand of the firm, its commitment  to its stakeholders and eventually to its bottom line.

At its most simplest the C-Q trade-off positions the highest quality with the highest price point and vice verse. The problem however lies with  finding the optimal C-Q point for all products and services that lie in between.

On a more complex plane the really successful businesses are those that manage to re-engineer their business model to achieve higher quality standards for the same price (or a lower price), or, by finding ways of lowering prices without compromising quality.

Allan Rodrigues of The Business Farm has considerable experience in Strategic and Operational Planning, particularly for companies under high growth, high risk or those operating in uncertain or fiercely competitve market places.