Total Quality Management and Porters Competitive Strategies

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Organizations need to develop appropriate strategies in order to maximize on their set objectives. These objectives might be either profit maximization or optimal inventory levels. Whichever objective the firms management intends to achieve, several tools might be utilized towards this end. This paper seeks to address strategies that can be adopted by an organization to reap maximum benefits and achieve its objectives.

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Total Quality Management (TQM) is a management philosophy that seeks to improve all facets related to the functions of an organization aimed at maximizing customer satisfaction as well as meeting the organizations objectives. The increased competition in the global market for products and services has created the need for firms to cut out competitive advantages for themselves. One such strategy for gaining a competitive edge is the use of quality to maximize revenues and maximize customer utility. TQM focuses on customers, employees, the role of senior management and the organizational production. Employees ought to be well trained and should regularly update their knowledge and skills to match up with current trends prevailing in the market. There is also a need for research to identify the needs and preferences of customers and to device appropriate strategies of meeting them. Senior management ought to create a conducive environment that encourages creativity and innovation amongst the employees. Such an environment enables employees to come up with new ingenious ways that better meet customer needs in ways unmatched by those of competitors. The organizational production strategy aims at sourcing the best quality materials to be used in production, the best prices for these products and reliable and accredited suppliers ("Porter's Generic Competitive Strategies (ways of competing)", 2016).

Porters competitive strategies could also be adopted by a firm so as to attain a competitive edge. These strategies target on cost leadership as well as product differentiation. In pursuing cost leadership, a firm seeks to produce goods at the lowest possible cost in the industry. Cost advantages can be derived from different sources and largely depend on the structure of the industry. Economies of scale, the adoption of superior technology in production as well as having preferential access to raw materials can help a firm have an upper hand in cost leadership. A firm that sells its products at the lowest possible cost in the industry is highly likely to be very competitive in the industry. A firm can also adopt a differentiation strategy so as to gain a competitive advantage in an industry by offering unique products and services. The firm can opt to concentrate on few attributes that are perceived to be crucial by customers and set out to exploit these them. Such a differentiation strategy works best in an industry where customers have varied needs. The focus on cost leadership seeks to exploit price differentiation in different market segments ("Total Quality Management (TQM): What is TQM? | ASQ", 2016).

These strategies are aimed at ensuring that the firm has a healthy cash flow where cash inflows are more than outflows. They also seek to maximize the firms profits through cost cutting measures such as reduction of such expenses as salaries and rent. Optimal utilization of the organizations assets should also achieved whereby assets are utilized in such a way that they yield maximum returns within their useful lifespan. Stock out costs should also be avoided by ensuring that the optimal inventory and production levels are maintained. Production should be undertaken at such a level that meets customer demand while ensuring that there is adequate buffer stock to cater for shortages. Too much stock will incur holding costs whereas too little production will incur stock out costs. An optimal production level should, therefore, be maintained. One way of gauging the effectiveness of these strategies is by using the contribution to assessing the profit margin earned at ascertaining price after deducting the associated variable costs.


Porter's Generic Competitive Strategies (ways of competing). (2016). Retrieved 13 August 2016, from

Total Quality Management (TQM): What is TQM? | ASQ. (2016). Retrieved 13 August 2016, from

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