Examples of external failure cost, Strategic Management

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Q. Examples of external failure cost

The customer perspective can control performance by the assessment of external quality failure.  Costs incurred after the customer has received the good or service. 

  • Administration of customer service and complaints
  • Cost of faulty product returns
  • Cost of product liability and warranty claims e.g. damages and repairs
  • Cost of free repairs and replacements for returns under guarantee
  • Loss of customer goodwill and brand reputation

 


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