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When a company thinks about its quality in relative terms, it compares its quality to the quality of its closest competitors. This company designs its products and services to compete only with these close competitors. In many industries, "close" refers to geographic proximity. This is especially true for service firms competing with other local service firms. In other industries, "close" is a value judgement, and refers to companies that offer very similar products or services, regardless of where in the world they are. |
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For companies with a relative perspective on quality, the point of the exercise is to beat their closest competitors. The easiest way for them to do this is to offer their customers similar products and services as the competition, for less money. Indeed, this is a very popular strategy for many companies around the world. |
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Another way companies compete with their closest competitors is to "one-up" them. In this scenario, a company would offer products and services that are slightly better than those offered by their closest competitors. They may offer a twelve-speed model when the competition offers a ten-speed, or they may offer same day service when the competition offers next day service. |
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Regardless of the specific details, a relative perspective on quality always leads companies to develop their quality in relation to what has been developed by other companies. Since improvements are only made in response to what has already been developed, this is a decidedly reactive strategy. But by keeping one's eyes on one's competitors, it is a certainty that the customer's perspective will be lost. To succeed, we have to view our work the way our customers see it. We have to focus on the value they see and seek - not on how our supposed competitors are operating. (Proactive Management of Disruptive Technology) |
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In the past, companies could do very well with a reactive approach to quality development. But times have changed. Few challenges in today’s business world can be handled with reactive strategies. Getting ahead and staying there increasingly requires a proactive strategy - a strategy that speaks in terms of absolutes. For companies to succeed in the new millennium, they will need a strategy that focuses on what customers need, not on what competitors are offering. |
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