Cost Quality Trade Off

The 'cost versus quality' or C-Q trade-off refers to the trade off between the price point and the quality of a product or service. It is therefore one of the most critical decisions made by a firm, as it impacts on a number of key business drivers, including the brand of the firm, its commitment  to its stakeholders and eventually to its bottom line.

At its most simplest the C-Q trade-off positions the highest quality with the highest price point and vice verse. The problem however lies with  finding the optimal C-Q point for all products and services that lie in between. On a more complex plane the really successful businesses are those that manage to re-engineer their business model to achieve higher quality standards for the same price (or a lower price), or, by finding ways of lowering prices without compromising quality.