Definition: Quality in the world of accounting is mainly focused on products and how they perform based on their specifications. Quality is also judged by how satisfied customers are with the products after purchase.
What Does Quality Mean?
Companies and managers pay close attention to the quality of their products. Does the quality add up to customer expectations? Is producing high quality goods so expensive that it becomes unreasonable to sell? These are just some of the problems managers face with quality problems.
Many companies, like Apple, tend to focus on producing the highest quality products they can. Steve Jobs is famous for says, “We won’t ship junk” after he was asked why the price of Apple computers was so high. Apple’s strategy is to ship and sell high quality products to its customers. This creates higher customer loyalty and satisfaction as well as returning revenue. If customers are satisfied with their current Apple device, they will probably buy another one in the future.
Quality also helps production and costs. Companies that produce high quality products tend to become experts within their product niche. They understand how to produce them and become more efficient at producing high quality products. Over time, companies can decrease production costs and actually increase production volume. Look at iPods for example. The more iPods Apples sold, the smaller, faster, and cheaper they became. This is true about all companies that produce quality products.
Some companies on the other hand, strategically produce products of low quality. These companies tend to be the cost leader in their market and sell the most inexpensive products available. Companies like Wal-Mart are not known for their quality, but they are known for their low prices.