Page 547 - Business Principles and Management

C HAPTER 19 A SSESSMENT

CASE IN POINT

CASE 19-1: Maintaining Quality in a Competitive Market
TaeMark, a major software development company, is facing increasing
competition from many new businesses. It prides itself on staying in
touch with its customers and carefully testing all new software products
and upgrades to ensure that they are easy to use and free of “bugs” be-
fore distributing them for sale. That process is both time-consuming and
expensive. It often takes more than a year to get a new type of software
on the market. The cost of the research and testing makes the company’s
software among the most expensive on the market.
TaeMark has noticed a new trend in software development in the past
several years. Small and large competitors are flooding the market with
new software. Many of the new products never achieve a high level of
sales and often are removed from the market after a few months. How-
ever, it appears the competitors are willing to develop many products that
don’t sell with the hope that a few will be very successful and profitable.
Also, most of the new software products are introduced without much
testing to ensure quality. The new software developers believe that cus-
tomers will put up with problems as long as the company quickly puts
out a new edition of the software that corrects the problem. Competitors
may put out two or three editions of a product in the time it takes TaeMark
to develop and test one product. Because of the way the new software de-
velopers operate, they can price their software much lower than TaeMark
can. TaeMark is also finding a change in customer attitudes about soft-
ware developers. Customers express growing dissatisfaction with quality
and say they are not willing to pay high prices for software when they
know they will have to upgrade the software frequently.

THINK CRITICALLY
1. Why do you believe some companies are willing to forgo the time
and cost of research and testing in order to get products on the mar-
ket faster?
2. Why do you believe customers appear to have negative attitudes
toward software developers yet are still willing to purchase their
products?
3. The new competitors are allowing customers to identify problems
with their software. Then they develop new editions that correct the
problems. Is this really a form of research? Why or why not?
4. Would you advise TaeMark to change its product development
process to be more like that of new competitors, or to continue the
process it has used in the past? What are the advantages and disad-
vantages of each choice?
5. Explain how TaeMark could use the SERVQUAL survey to improve
the quality of its software. Would ISO certification help TaeMark
sell its software?

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