As technological development continues to intensify business competition

[kiskopata]

“As technological development continues to intensify business competition, the quality of customer service is likely to become the only sustainable source of competitive advantage.”

Explain what you think this quotation means and discuss the extent to which you agree or disagree with it. Develop your position with reasons and/or specific examples drawn from history, current events, or your own experience, observations, or reading.

RESPONSE
The given statement implies that as business competition is increasing, each business unit tries to match the quality of the product with their competitors. The statement further explains that after the stage is achieved, in which, two business competitors have the same good quality product, there is only one factor that determines who gets the most customers. This factor is customer service. I would disagree with the statement and explain my reasoning as follows:

Firstly, I believe that there would always be a value addition to any product. Through new technological developments, it would always be possible to optimize the manufacturing, logistics, or make the product more useful for the customer by including additional features.

Secondly, the market is global now unlike before. It may be possible to reduce the cost of a product by outsourcing manufacturing or labor to countries such as India and China. Consider for example manufacturing of laptop computers. United States is currently the largest consumer of laptops, but a majority of them are made in Taiwan and China. So if a manufacturer in the United States provides builds a laptop with the same quality product with identical features to a laptop built in Taiwan, the US company will have less profit margin due to higher labor costs.

Thirdly, improving the quality of customer service may itself be an innovation. There could be new technology to improve response time of ambulances to emergency patients, or a new method of electronic payment for a bank that can improve customer service. Improving customer service itself is also a technology development product.

Fourthly, expanding the market is also a viable option for a growing company looking to improve its business. As Asian markets are growing, their demand for Hi tech products is increasing. It will be vital to capture these growing markets, for a company to increase it's profits.

For some low technology products it may be true that all technological developments in the quality of the product have being achieved. However, there always will be room for improvement in logistics, supply management, inventory control, and expanding to other markets for these products. Since the economic conditions are always dynamic, and customers change their needs from time to time, there would always be room for improvement in technology areas of the product and expand to new markets.