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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” before 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. However, 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 customers 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 developers operate, they can price their software much lower than TaeMark can. TaeMark is also finding a change in customer attitudes about software 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 market 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 disadvantages 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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