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Business Analysis: Microsoft by Conrad Carlberg

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10. Measuring Quality

Product quality is an important part of profitability. Other things being equal, a product with a reputation for high quality tends to sell more units than a product that’s known to have poor quality. A product with good quality gets fewer customer complaints, fewer free service calls, and fewer warranty repairs. Poor product quality goes directly to the bottom line in the form of lost profit.

It’s also true that the quality of operations drives profit margins. When a customer service representative spends too much ...

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