Operation Strategy Quality Measures

In: Business and Management

Submitted By ashwaniiim
Words 125933
Pages 504
The Role and Measurement of Quality in
Competition Analysis
The OECD Competition Committee discussed the role and measurement of quality in
competition analysis in June 2013. This document contains an executive summary of that
debate and the documents from the meeting: an analytical note by the OECD staff and
written submissions: Australia, Canada, Chile, the European Union, Indonesia, Japan,
Mexico, Portugal, United Kingdom, Ukraine, United States and BIAC. A note by Theodore
Voorhees Jr. as well as a detailed summary of the discussion are also included.

Competition policy is just as concerned with quality as it is with prices. While the importance of quality is
undisputed and issues about quality are mentioned pervasively in competition agency guidelines and court
decisions, there is no widely-agreed framework for analysing it which often renders its treatment superficial.
There are a number of reasons why in practice, courts and competition authorities rarely analyse quality effects
as rigorously as they analyse price effects. First, quality is a subjective concept and therefore much harder to
define and measure than prices. In addition, microeconomic theory offers little help in predicting how changes
in the level of competition in a market will affect quality and it is usually up to empirical analysis to determine
how quality will change in response to varying degrees of competition in the context of particular markets.
Given difficulties in terms of the evaluation of quality factors, particularly in quantitative assessment,
competition agencies end up using qualitative tools such as customer surveys and interviews, to assess quality
where necessary. While experience with the implementation of quantitative econometric techniques is rather
limited, they may become more readily applicable and widely used in the future. At the level of competition…...

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