1025
QUALITY AS A DIFFERE�TIATI�G ELEME�T I� THE B2B
MARKET OF BOS�IA A�D HERZEGOVI�A
Zijada Rahimić The School of Economics and Business Sarajevo, Associate Professor
Trg Oslobođenja – Alija Izetbegović 1, Sarajevo
Bosnia and Herzegovina
Phone: ++ 387 33 275-998; Fax: ++ 387 33 275-994
E-mail: [email protected]
Kenan Uštović NCH Bosnia d.o.o. Sarajevo, General Director
Kaptol 32, Sarajevo
Bosnia and Herzegovina
Phone: ++ 387 61 349-679
E-mail: [email protected]
Abstract
Using quality as a basis for differentiation today has become much more demanding than
before. In order to achieve some competitive advantage these days it is not enough to build
only a quality management system according to ISO 9001:2000 requirements. Companies
need to invest much more resources and knowledge to upgrade their quality systems and
use that way like tool to attract and retain customers. We will explore some options that
companies can use on the BiH market, especially when we talk about B2B sales. During
the world economic crisis and severe refraction of entire national economies, companies
are faced with the questions of the applicability and sustainability of their business
strategies. Stuck in the unusual economic and financial environment, companies are forced
to react rapidly if they want to survive on the market. Their only goal is to keep the
econometric parameters within normal limits. Therefore, we have witnessed that many of
them are using short term and less efficient tools in order to stop or reduce the negative
trend. One of the short term and rapid method of reacting to the economic crisis is the
increasing number of persons employed in the sales sector, while companies are struggling
to keep the planned sales level. This situation is evident also on the market of Bosnia and
Herzegovina. Using the method of incomplete induction, we conducted a research for
employment supply in four countries: Bosnia and Herzegovina, Croatia, Slovenia and
Serbia. This paper includes research about companies’ willingness to use quality as
differentiation tool. Research was conducted through individual interview survey based of
pre-prepared questionnaire and includes companies engaged in B2B sales. Research results
should demonstrate differences in companies quality perception related to their products.
Research was implemented on the territory of Bosnia and Herzegovina. The sample size
was 44 companies (20 international and 24 domestic companies). Analyzing the results of
researches we make a conclusion about possibilities that companies keep or even achieve a
competitive advantage in a time of global economic crisis.
Keywords: B2B sales, competitiveness, differentiation, economics crisis, quality
JEL classification: L15, L81, C12, C14
1026
1. Introduction
In the increasingly harsh conditions of global hypercompetition, the only aim for
companies is the ceaseless growth and development in many business fields. If they want
to continuously manage their own growth, companies need to be prepared to respond to all
demands and requirements which are conditioned by market development. Certainly, the
main criteria for survival on the market are set by stakeholders (investors, costumers,
community...). The intensity of the development and distribution of new products and
services, today become the core competence for market-oriented companies. This is a
world of winner-take-all markets (Conti, T., Kondo, Y., Watson, G.H. 2003: 121).
Except for increasing customer satisfaction, quality of products and processes
directly (positively) affects the efficiency, productivity, profitability, motivation, image
and competitive position of the company. This paper presents unique research in Bosnia
and Herzegovina, about possibilities that companies, on this territory, use quality in the
differentiation process. Before we present results of this research, we will explore trend of
increasing the number of employees in sales (sales representatives) during the global
economic crisis. Increasing the number of sales representatives company are trying to
keep, at least, the same level of sales as it was before the crisis. But this is only short-term
and not very effective tool for overcoming sale problems. The aim of this review is to
demonstrate that companies should focus their resources on increasing the quality level,
rather than increasing the number of sales representatives who will sell the same products
and services. This paper will also discuss about possibilities and approaches for the
upgrading and improvement of quality system that companies need to achieve in order to
stay (become) competitive. Quality levels that provide an advantage for companies are
constantly increasing. Before, it was enough to fulfill requirements only for ISO 9001
standard, but this is not a guarantee for success anymore. If the company wants to achieve
long-term competitive advantage, upgrading the quality system through the methods like:
Kobayashi’s 20 keys, Six Sigma or Lean Management is advisable.
Although the paper has three parts it is easy to find their link. Short research about
employment supply has the task to show us the main focus of today’s companies:
expansion of sales network or focus on quality? In the second part of the paper through the
presentation of ISO standard we are giving an answer to the question: Do companies think
that ISO 9001:2000 standard is sufficient to say that they care about quality, and whether
the companies are familiar with modern methods of quality management that are presented
in this paper? In the last part we linked local research about importance of quality with the
findings that we presented in first two parts.
2. Literature review
The concept of the quality is immanent and difficult to define. Today the quality is not just
technical issue, it is the business requirement that pushes company to become better for
their customers, and need to be the duty of all employees. The definition depends on the
purpose and for whom you are talking. For customers quality is whatever they say it is, and
include the expected characteristics of the product or service. Deming (1986:168) suggests
that quality is defined by the customer and has many measurement scales, one for each of
the characteristics the customer considers important. On the other hand, Juran (1989:15)
defines quality as “fitness for use”, with each product having multiple quality
characteristics of two kinds: customer-desired product features and freedom from
deficiencies (Sparks, R.E. & Legault, R.D., 1993:16).
1027
The ISO 8402 (now ISO 9000) standard defines quality as “the set of characteristics
of an entity that gives that entity the ability to satisfy expressed and implicit needs.” Other
definition is that quality is the degree to which a set of inherent characteristics fulfils
requirements (Hoyle, 2006:8). Garvin (1987:104) treats his quality characteristics or
dimensions as a clear vocabulary with which to discuss quality as a strategy.
For Bowbrick (1992) the quality of goods or of a service (or at least a customer's
perception of it) can be significantly influenced by the customer's expectations from the
product, which in turn can be founded on a number of assumptions. Both these factors can
be influenced (and manipulated) significantly by the supplier as well as by a number of
other factors. For Riaz (2010) quality is a momentary perception that occurs when
something in environment interacts with human factor, in the pre-intellectual awareness
that comes before rational thought takes over and begins establishing order.
Many authors have written about the recession and the possibilities that companies
can use during this period (Canlon, F. 2011.; Krell, E. 2011.; Mavlutova, I., Mavlutov, B.
2011.; Srinivasan, S.R., Sivakumar, S.N.V. 2011.; Vojtovich, S. 2011.; Gulati, R., Nohria,
N., Wohlgezogen, F. 2010.; Ohanian, L. 2010.; Rhoads, C.J., Gupta, K. 2010.; Poulin,
L.M. 2009.; Poulin, L.M. 2009.; Pratt, M.K. 2009.; Polyak, I., 2008.; Sahin, A., Kitao, S.,
Cororaton, A., Laiu, S. 2001.). The biggest mistake we see every day is the lack of
understanding witch tools will help company to overcome recession and sales gap.
3. Research questions, data and methodology
At first we use method of incomplete and complete induction. Incomplete induction we
used when we analyze the employment supply in four different countries (Bosnia and
Herzegovina, Croatia, Slovenia and Serbia). We explored does world economic crisis
causes the high employment supply rate in sales. Complete induction we used for
analyzing the intensity of ISO 9001 standard in some geographical zones. To calculate
intensity we used formula:
��������� (�� 9001) = ������ �� ��� �������� ���!" (���!��y)/ GDP (���!��y)
������ �� ��� �������� ���!" (z�!�) / GDP (z�!�), (1)
The main objective of this paper is to acknowledge the level of awareness and
acceptance of quality issue like differentiation tool companies can use on the market. The
Design Production Sale DeliveryPerceived
quality
-Performance
-Features
-Aesthetics
-Reliability
-Durability
-Conformance
-Facilities
-Communication
-Process
-Transaction
System
-Quantity
-On-time
-Place
-Anticipated
Service
-Unanticipated
Service
Figure 1: A practical definition of quality for products
%ote: figure is adapted for by authors
Source: Garvin, D.A. 1987: 101-109; Sparks & Legault, 1993: 17
1028
general research hypothesis is: International companies, as opposed to domestic, use
quality like differentiation tool for building competitive advantages. As research form we
used data collection questionnaires (DCQ). The technique was written survey and way of
realization was individual research. The research process lasted five months (January-May
2010) on the territory of Bosnia and Herzegovina. The geographical scope of the survey
covers the following six cities: Banja Luka, Lukavac, Mostar, Prijedor, Sarajevo and
Tuzla. The sample consists of 44 companies in default and was composed of 20
international (45.45%) and 24 domestic (54.55%) companies. The companies used for
research were selected by simple random sampling from online database of companies1.
Questionnaires were distributed to companies in several ways, mostly through e-mail or
direct contact with company management. Companies that we used as research sample
have a various ownerships, work in different business sectors (industries), sell a wide
variety of products and services, they are geographically dispersed and different by size.
The sampling process required the following adjustments:
• International companies include companies with local offices, branches or
subsidiaries on the territory of Bosnia and Herzegovina, or domestic companies
where the control block of shares has some international company.
• Domestic companies include companies where the most of start-up capital is from
Bosnia and Herzegovina.
• Companies need to deal in B2B sector, selling goods and services through their
sales representatives.
• The research can be conducted only with the high management of companies.
During the processing and presentation of results obtained by research, we used few
methods, commonly non-parametric statistics, considering that research sample was
relatively small. In some cases when we were not able to use any statistical test we
presented our results through simple percentages or proportions. In case where this was
possible2 with the proportion we used Chi Square test to determine whether certain groups
(in this research, categories of domestic and international companies) are significantly
different from anticipated results or frequencies.
)* = + +,-./01./2
*
1.//. , (2)
Where, O – Observed frequencies; E – Expected frequencies.
For questions whose answers were scaled from 1 to 5 or 1 to 7, we followed two
procedures: Kolmogorov-Smirnov normality test (K-S) and Mann-Whitney-Wilcoxon test
(M-W). K-S test was needed to determine if two datasets differ significantly and had the
advantage of making no assumption about the distribution of data.
34 = 5678 9:(8) − :<4(8)9 , (3)
Where, n – number of (independent) observations; G<(x) – empirical cumulative
distribution function (cdf); G – completely specified continuous theoretical cdf.
M-W test like, non-parametric statistical hypothesis test, we used for assessing
whether two independent samples of observations have equally large values.
> = 4?4* + 4*(4*A?)
*− + B.
4*.C4?A? , (4)
Where, U – M-W U test; !D – sample size one; !E - sample size two; RG - rank of the
sample size.
1 As the primary online database of companies has been used: www.poslovni-adresar.ba
2 If any of the expected cell frequencies of Chi Square test are less then five.
1029
With M-W test we treated differences between the mean ranks, which indicated
statistically significant or insignificant differences between observed categories. K-S test
results are further checked by Shapiro-Wilk (S-W) test.
H =,+ I?8(.)
4.J? 2
*
+ (8.08K)*4.J?
, (5)
Where, XG – ith smallest number in the sample; sample mean is:
)M =(8?A⋯A84)
4 , (5.1)
The constants G are given by:
(O?, … OR) = STUV?
,STUV?UV?S2?/* , (5.2)
Where, � = (�D, … , �W)X and (�D, … , �W) are the expected values of the order statistics
of independent and identically-distributed random variables sampled from the standard
normal distribution, and V is the covariance matrix of those order statistics (Royston,
1983; Villasenor and Estrada, 2009; Tasdan and Sievers, 2009; Drezner, Turel and Zerom,
2010).
In some results presentations we excluded tables or diagrams, but they are
presented in text form: {M-W = X; p = X <> 0.05; Mean-rank ‘I%T/DOM’ = X/X, Median
(Md) ‘I%T/DOM’ = X/X}. In other cases, when it was apposite, we used cross-tabulation to
show answers dynamism for certain categories on two juxtaposed and adjacent questions.
4. Opportunities for sales and quality improvement in BiH
4.1. Research results and discussion about employment supply in region
It has be a few years since world went through the strongest recession. According to some
economists and researches it has been since 2001 that we have enjoyed tough economic
times. Many business people fear a recession or soft economy, reasoning that if the
economy is bad, clients and customers will reduce their projects, stop the consumption, and
even sacrifice quality or buy only from low price suppliers. But when most of the
companies see economic slowdown like a big problem, best and most success companies
recognize opportunity to gain new customers and boost their sales, developing special
marketing and sales methods that will help them in recessionary periods.
Today, companies very often increase the number of sales representatives with
hope that they will help them keeping the earlier sales level and/or improving their
competitive advantage. However this strategy is wrong, or gives results only in short-term
period. There are several reasons why this strategy is wrong: a) the companies are
increasing their costs, although they should decrease them in recession times, b) new sales
representatives need some time to demonstrate their abilities, c) international companies in
Bosnia and Herzegovina are investing more resources in sales team education than
domestic companies. Research we conducted at the state level of Bosnia and Herzegovina)
shows that domestic companies do not invest enough resources in their sales training. For
those companies is characteristic that 67% had never used external and 38% had never
used internal education. Cluster analysis of the summary results shows that more then 1/3
of domestic companies has never used any type of education for their sales team. The
(Table 1) shows results of short survey which was conducted using dates from web sites
that people use in searching employment process.
1030
Tab
le 1
: E
mplo
ym
ent
supply
by c
ountr
y
Co
un
try
BO
S�
IA A
�D
HE
RZ
EG
OV
I�A
CR
OA
TIA
SL
OV
E�
IA
SE
RB
IA
Ra
nk
C
ate
go
ry
f %
C
ate
go
ry
f %
C
ate
go
ry
f %
C
ate
go
ry
f %
1
Co
mm
erci
al
-
sale
s 2
59
38,89
Co
mm
erci
al
–
sale
s 1
53
17,75
Co
mm
erci
al
–
sale
s 1
93
22,16
Co
mm
erci
al
–
sale
s 1
45
10,98
2
Mar
ket
ing -
PR
8
1
12,16
Hea
lth
ser
vic
e 9
3
10,79
Mec
han
ical
en
gin
eeri
ng,
met
allu
rgy,
min
ing
87
9,99
Ch
emis
try,
ph
ysi
cs,
mat
hem
atic
s (n
atu
ral
scie
nce
s)
105
7,95
3
Info
rmat
ics
-
soft
war
e 5
0
7,51
Eco
nom
y,
fin
ance
,
insu
ran
ce
71
8,24
Man
ufa
ctu
rin
g
79
9,07
Mec
han
ical
en
gin
eeri
ng,
Ele
ctro
nic
s &
Tel
ecom
mu
nic
atio
ns
99
7,50
4
Job
s fr
om
ZZ
ZR
S*
4
3
6,46
Tou
rism
& h
osp
ital
ity
68
7,89
Tec
hn
ical
ser
vic
es
76
8,73
Tou
rism
& h
osp
ital
ity
86
6,52
5
Eco
nom
y,
fin
ance
,
insu
ran
ce
30
4,50
Ele
ctri
cal
&
mec
han
ical
engin
eeri
ng
61
7,08
Ele
ctri
cal
engin
eeri
ng,
Ele
ctro
nic
s &
Tel
ecom
mu
nic
atio
ns
54
6,20
Lan
gu
ages
, tr
ansl
atio
n,
lite
ratu
re
79
5,98
6
Sci
ence
&
Edu
cati
on
23
3,45
Sci
ence
& E
duca
tion
55
6,38
Bu
sin
ess
con
sult
ing
51
5,86
Info
rmat
ics
- so
ftw
are
78
5,91
7
Man
agem
ent
20
3,00
Inst
alla
tion
-
mai
nte
nan
ce -
rep
air
47
5,45
Com
pu
ters
, p
rogra
mm
ing
45
5,17
Eco
nom
y,
fin
ance
,
insu
ran
ce
73
5,53
8
Ele
ctri
cal
&
mec
han
ical
engin
eeri
ng
18
2,70
Tra
nsp
ort
- s
tora
ge
and
logis
tic
40
4,64
Ph
arm
acy &
Ch
emis
try
33
3,79
Man
agem
ent
63
4,77
9
Pu
bli
c se
rvic
e &
adm
inis
trat
ion
13
1,95
Civ
il e
ngin
eeri
ng -
geo
des
y
40
4,64
Tou
rism
& h
osp
ital
ity
31
3,56
Hea
lth
ser
vic
e 5
5
4,17
10
Oth
er
129
19,37
Oth
er
234
27,15
Oth
er
222
25,49
Oth
er
537
40,68
S
UM
6
66
100,00
SU
M
862
100,00
SU
M
871
100,00
SU
M
1320
100,00
ww
w.p
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a
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w.p
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del
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all
web
pag
es
are
vis
ited
at
22
/11
/201
1. T
he
nam
es a
nd
co
nte
nts
of
som
e ca
tego
ries
are
ad
apte
d f
or
the
rese
arch
. *Z
ZZ
RS
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epub
lic
of
Srp
ska E
mp
loym
ent
Inst
itute
So
urc
e: b
ased
on d
ata:
fo
r B
osn
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nd
Her
zego
vin
a (h
ttp
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sao
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roat
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p:/
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osa
o.h
r);
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venia
(htt
p:/
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w.m
oje
del
o.c
om
) an
d S
erb
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(htt
p:/
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w.p
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rs),
tab
le a
nd
cal
cula
tio
ns
mad
e b
y a
uth
ors
1031
The results show the employment supply in four countries when the recession was
an integral part of the market. As we can see for all analyzed countries Commercial – sales
job offers are most frequent. This is especially noticeable in Bosnia and Herzegovina,
where approximately 40% of employment supply is related to sales. Increasing the number
of sales representatives without additional sales training is a multiple cost for the company.
At first, these representatives will not be able adequately to respond to all market needs,
and a lack of sales methods and tools will lead to their low motivation and poor
performances. But definitely, the largest loss is the opportunity cost for new sales
representatives. Instead of that, resources should be redirected in rationalization,
improvement and modernization of sales system, which will be more adapted and adjusted
for industrial customers. Also, investments in quality is very good opportunity for
companies to overcome market problems and differentiate themselves from competition.
4.2. Quality as a competitive advantage
Presumably, a firm’s capability to offer superior product quality is based on its willingness
to change structurally (Bettis, 1994), philosophically (Bounds, York, Adams, Ranney,
1994), transactionally (Bowen & Jones, 1986), or culturally (Cameron, 1994) in order to
enhance its level of customer orientation. We contend that a customer-oriented firm with
superior product quality not only may attain competitive advantage and increased returns
but also may be better capable of buffering itself against the threat of rivalries and
macroeconomic forces (Kroll & Wright, 1999).
Costumer needs are constantly growing and companies need to be able to handle
the demands of the modern era. The company's strategy in future will not be based solely
on the production of cheap and quality products and services then the competition, but a
better understanding of the global market. That means the struggling with the competition
and gaining new markets with the products that will offer different new values, best quality
and will satisfy unique and individual requirements. Because of this, companies need to
continually improve their quality. Gone are the days when the ISO standard was sufficient
indication of quality. Today, many competitors own ISO 9001:2000 certification, so
companies are obligated to seek new ways for differentiation. When we talk about quality,
modern differentiation is reflected in some new methods such as Kobayashi’s 20 keys, Six
Sigma or Lean Management. Further in this paper we will present ISO 9001:2000
Standard, but other new methods will be also discussed.
4.2.1. Quality management system (ISO 9001:2000) and competitiveness
Every company would like to improve the way it operates, whether that means increasing
market share, cutting costs, managing risk more effectively or improving customer
satisfaction. ISO 9000 has become a favored system for many organizations embarking on
quality improvement. ISO 9001:2000 is an information-sharing tool that an organization
can use to gain the knowledge needed to enhance quality and performance. It also provides
a ready framework for ordering and structuring an organization’s knowledge (Lin, C. &
Wu, C. 2005:657). ISO 9001:2000 specifies requirements for a quality management system
where an organization (a) needs to demonstrate its ability to consistently provide product
that meets customer and applicable regulatory requirements, and (b) aims to enhance
customer satisfaction through the effective application of the system, including processes
for continual improvement of the system and the assurance of conformity to customer and
applicable regulatory requirements (Zhou, M. 2011:19). Below, we will present two short
studies about ISO 9001:2000 Standard that will help us to understand its importance level.
1032
Table 2: Intensity of ISO 9001:2000 Standards by country – (2008)
%ote: Values of GDP are taken from CIA web page and converted to BAM using exchange rate
1USD=1,328599BAM (Currency exchange as at 01.01.2008. from Central Bank of Bosnia and
Herzegovina). Quantities of ISO are taken for ISO survey for 2008 available on web site www.iso.org.
Intensity, rank and GDP % are calculated by authors.
Sources:
• http://www.iso.org/iso/survey2009.pdf;
• http://www.iso.org/iso/survey2008.pdf;
• https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html
• http://www.cbbh.ba/index.php?id=4&year=2008&ex_rate=001.
*
(32)
RA
NK **
(27)
RA
NK ***
(28)
RA
NK ****
(6)
RA
NK
1 Austria � � � 553.522,24 2,25 4.272 0,4660 26 0,4665 21 0,4660 22
2 Belgium � � � 673.222,37 2,73 4.875 0,4373 27 0,4377 22 0,4372 23
3 BiH ���� ���� ���� 24.580,41 0,10 811 1,9923 6 1,9922 6 1,5966 1
4 Bulgaria � � � 68.853,31 0,28 5.323 4,6682 1 4,6726 1 4,6680 1
5 Croatia � � 92.082,54 0,37 2.302 1,5096 13 1,2097 5
6 Cyprus � � � 33.800,89 0,14 555 0,9915 16 0,9924 11 0,9914 12
7 Czech Rep. � � � 287.095,63 1,17 10.089 2,1220 5 2,1240 5 2,1219 5
8 Denmark � � � 453.672,71 1,84 1.574 0,2095 31 0,2097 26 0,2095 27
9 Estonia � � � 31.493,11 0,13 691 1,3249 15 1,3262 10 1,3248 11
10 Finland � � � 361.048,11 1,47 1.975 0,3303 30 0,3306 25 0,3303 26
11 France � � � 3.806.727,10 15,46 23.837 0,3781 29 0,3785 24 0,3781 25
12 Germany � � � 4.851.575,88 19,71 48.324 0,6015 24 0,6020 19 0,6014 20
13 Greece � � � 463.247,93 1,88 6.747 0,8795 19 0,8803 14 0,8794 15
14 Hungary � � � 208.207,41 0,85 10.187 2,9544 2 2,9572 2 2,9542 2
15 Ireland � � � 351.935,25 1,43 2.237 0,3838 28 0,3842 23 0,3838 24
16 Italy � � � 3.065.472,49 12,45 118.309 2,3305 4 2,3327 4 2,3303 4
17 Latvia � � � 44.994,33 0,18 500 0,6710 23 0,6716 18 0,6710 19
18 Lithuania � � � 62.838,75 0,26 815 0,7832 20 0,7839 15 0,7831 16
19 Luxembourg � � � 77.507,81 0,31 246 0,1917 32 0,1918 27 0,1916 28
20 Macedonia � � 12.163,32 0,05 271 1,3454 14 1,0782 6
21 Malta � � � 11.544,20 0,05 355 1,8569 9 1,8586 7 1,8568 8
22 Montenegro � � 6.033,17 0,02 160 1,6014 12 1,2833 4
23 Netherlands � � � 1.165.811,08 4,74 13.597 0,7043 21 0,7049 16 0,7042 17
24 Poland � � � 703.361,64 2,86 10.965 0,9413 17 0,9422 12 0,9413 13
25 Portugal � � � 336.357,42 1,37 5.128 0,9206 18 0,9215 13 0,9205 14
26 Romania � � � 271.484,59 1,10 10.737 2,3881 3 2,3904 3 2,3880 3
27 Serbia � � 64.880,80 0,26 2.091 1,9461 8 1,5596 2
28 Slovakia � � � 126.143,83 0,51 3.476 1,6639 10 1,6655 8 1,6638 9
29 Slovenia � � � � 72.942,74 0,30 1.945 1,6101 11 1,6116 9 1,6100 10 1,2903 3
30 Spain � � � 2.127.629,07 8,64 68.730 1,9506 7 1,9525 6 1,9505 7
31 Sweden � � � 645.910,36 2,62 5.377 0,5027 25 0,5032 20 0,5026 21
32 UK � � � 3.559.333,99 14,46 41.150 0,6981 22 0,6988 17 0,6981 18
SUM SUM SUM AVG
* 24.615.474 100,00 407.651 1,2923
** 24.415.734 99,19 403.961 1,2219
*** 24.440.315 99,29 404.772 1,2482
**** 272.683 1,11 5.635 1,3363
All countries (32)
European Union (27)
European Union + BiH (28)
Ex-Yugoslavian Countries (6)
**
**
GDP
(billion
BAM)
Qu
an
tity
of
ISO
Intensity
No. Country
* **
**
*
GD
P %
(3
2)
1033
Tab
le 3
: S
tati
stic
al d
ata
about
num
ber
of
ISO
900
1:2
000 S
tandar
ds
in t
he
worl
d –
(2009)
S
ou
rce:
dat
e ar
e ad
apte
d f
rom
: htt
p:/
/ww
w.i
so.o
rg/i
so/s
urv
ey2
00
9.p
df
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
46.571
70.364
127.349
162.701
223.299
271.847
343.642
457.834
510.349
561.767
497.919
660.132
773.867
896.929
951.486
982.832
1.064.785
1.272
1.855
3.378
6.162
8.668
12.150
17.307
20.183
19.800
23.627
20.124
31.443
48.327
71.438
78.910
73.104
77.408
140
475
1.220
1.713
2.989
5.221
8.972
10.805
14.409
13.679
9.303
17.016
22.498
29.382
39.354
39.940
36.551
2.613
4.915
10.374
16.980
25.144
33.550
45.166
48.296
50.894
53.806
40.185
49.962
59.663
61.436
47.600
47.896
41.947
37.779
55.400
92.611
109.961
143.674
166.255
190.247
269.332
269.648
292.878
242.455
320.748
377.196
414.232
431.479
455.332
500.319
1.583
3.091
9.240
18.407
29.878
37.920
56.648
81.919
126.779
148.573
163.061
220.966
247.091
300.851
345.428
356.559
398.288
3.184
4.628
10.526
9.478
12.946
16.751
25.302
27.299
28.819
29.204
22.791
19.997
19.092
19.590
8.715
10.001
10.272
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
2,7%
2,6%
2,7%
3,8%
3,9%
4,5%
5,0%
4,4%
3,9%
4,2%
4,0%
4,8%
6,2%
8,0%
8,3%
7,4%
7,3%
0,3%
0,7%
1,0%
1,1%
1,3%
1,9%
2,6%
2,4%
2,8%
2,4%
1,9%
2,6%
2,9%
3,3%
4,1%
4,1%
3,4%
5,6%
7,0%
8,1%
10,4%
11,3%
12,3%
13,1%
10,5%
10,0%
9,6%
8,1%
7,6%
7,7%
6,8%
5,0%
4,9%
3,9%
81,1%
78,7%
72,7%
67,6%
64,3%
61,2%
55,4%
58,8%
52,8%
52,1%
48,7%
48,6%
48,7%
46,2%
45,3%
46,3%
47,0%
3,4%
4,4%
7,3%
11,3%
13,4%
13,9%
16,5%
17,9%
24,8%
26,4%
32,7%
33,5%
31,9%
33,5%
36,3%
36,3%
37,4%
6,8%
6,6%
8,3%
5,8%
5,8%
6,2%
7,4%
6,0%
5,6%
5,2%
4,6%
3,0%
2,5%
2,2%
0,9%
1,0%
1,0%
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
23793
56985
35352
60598
48548
71795
114192
52515
51418
-63848
162213
113735
123062
54557
31346
81953
583
1523
2784
2506
3482
5157
2876
-383
3827
-3503
11319
16884
23111
7472
-5806
4304
335
745
493
1276
2232
3751
1833
3604
-730
-4376
7713
5482
6884
9972
586
-3389
2302
5459
6606
8164
8406
11616
3130
2598
2912
-13621
9777
9701
1773
-13836
296
-5949
17621
37211
17350
33713
22581
23992
79085
316
23230
-50423
78293
56448
37036
17247
23853
44987
1508
6149
9167
11471
8042
18728
25271
44860
21794
14488
57905
26125
53760
44577
11131
41729
1444
5898
-1048
3468
3805
8551
1997
1520
385
-6413
-2794
-905
498
-10875
1286
271
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
51,1%
81,0%
27,8%
37,2%
21,7%
26,4%
33,2%
11,5%
10,1%
-11,4%
32,6%
17,2%
15,9%
6,1%
3,3%
8,3%
45,8%
82,1%
82,4%
40,7%
40,2%
42,4%
16,6%
-1,9%
19,3%
-14,8%
56,2%
53,7%
47,8%
10,5%
-7,4%
5,9%
239,3%
156,8%
40,4%
74,5%
74,7%
71,8%
20,4%
33,4%
-5,1%
-32,0%
82,9%
32,2%
30,6%
33,9%
1,5%
-8,5%
88,1%
111,1%
63,7%
48,1%
33,4%
34,6%
6,9%
5,4%
5,7%
-25,3%
24,3%
19,4%
3,0%
-22,5%
0,6%
-12,4%
46,6%
67,2%
18,7%
30,7%
15,7%
14,4%
41,6%
0,1%
8,6%
-17,2%
32,3%
17,6%
9,8%
4,2%
5,5%
9,9%
95,3%
198,9%
99,2%
62,3%
26,9%
49,4%
44,6%
54,8%
17,2%
9,8%
35,5%
11,8%
21,8%
14,8%
3,2%
11,7%
45,4%
127,4%
-10,0%
36,6%
29,4%
51,0%
7,9%
5,6%
1,3%
-22,0%
-12,3%
-4,5%
2,6%
-55,5%
14,8%
2,7%
Au
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lute
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1034
Exponential growth of ISO 9001:2000 Standard is caused by:
1. Government's efforts to promote its policies and active role in the economy,
2. Customer requirements,
3. Companies' wish to be competitive on the market.
However, after some time, many companies do not express an interest in certification,
because the perceived level of competitive advantage achieved through certificates
disappears. Today it is considered that the value of certificates is inversely proportional to
the number of issued certificates. Using the formula (1) we calculated intensity level by
country and as we can see on the (Table 2). Bosnia and Herzegovina (1.9923) ranks sixth
place of intensity of ISO 9001:2000 Standards, among countries of Europe, right after
Bulgaria (4.6682); Hungary (2.9544); Romania (2.3881); Italy (2.3305) and Czech
Republic (2.1220). The intensity was calculate in a manner that represents the quotient of
two ratios: for dividend we have ratio between number of ISO 9001: 2000 Standards for
one country and GDP of that country, and for divisor we have ratio between number of
ISO Standards 9001:2000 in some particularly zone and GDP of that zone. Among ex-
Yugoslavian countries best result has Bosnia and Herzegovina (1.5966), and after that
Serbia (1.5596); Slovenia (1.2903); Montenegro (1.2833); Croatia (1.2097), and
Macedonia (1.0782). Considering that the GDP of Bosnia and Herzegovina is one of four
lowest among 32 countries (lower GDP only in Montenegro, Macedonia and Malta), the
sixth place among European and first among ex-Yugoslavian countries is very good result.
When we talk about world share of ISO 9001:2000 Standards (Table 3), we can see
that Europe has the best average regional share in last sixteen years (57.4%), with average
annual growth of (19.1%). Taking into consideration all 178 countries that are included
into research average annual growth is (23.3%) and on the end of 2009 we had more than
one million certificated issued. From those results it is obvious that world reached its
saturation point, and possibility that some company achieves competitive advantage only
using ISO 9001:2000 Standard does not exist anymore. For this reason the efforts of
companies, at least for quality, should be directed to the other side. Below, we present the
possibilities that company can use to upgrade and improve its system of quality control,
like new opportunity for differentiation.
4.2.2. Kobayashi’s 20 Keys
The “20 Keys” were developed more than 12 years ago by Professor Iwao Kobayashi of
the Practical Program of Renewal in Factories Institute in Japan. The approach has been
implemented in several hundred Japanese companies and has spread to the South Africa.
This approach offers a way to look at the strength of organizations and to systematically
improve it, one step at a time, by focusing on 20 different but interrelated aspects
(Petrarolo, D. 1998:22). Kobayashi says: „Managers need to determine to what degree
their companies can rapidly respond to change, and to regard such responsiveness as a
standard for evaluating corporate strength. To have such a standard, they must have a
specific means of evaluation and specific items that can be improved. Managers cannot
make their companies stronger unless they know how to improve items that assessment
shows require improvement”. The 20 Keys system is designed to help companies
significantly improve their efficiency. The main objective of the program is to identify and
eliminate any type of activity which is not adding value. There are four pillar keys: (1)
Cleaning and Organizing; (2) Rationalizing the System/MBOs; (3) Improvement Team
1035
Activities and (4) Leading Technology and Site Technology. These keys enhance growth
and development of other 16 keys. All keys are presented in (Table 4).
Table 4: Kobayashi’s 20 keys and aims
Aim 20 keys
Energized
workplace
K1 Cleaning and Organizing
K2 Rationalizing the System/MBOs
K3 Improvement Team Activities
K4 Time Control and Commitment
Quality improvement
K5 Zero Monitor Manufacturing
K6 Maintaining Equipment
K7 Quality Assurance System
K8 Developing Your Suppliers
K9 Skill Versatility and Cross Training
Cost reducing (higher
productivity)
K10 Eliminating Waste (Treasure Map)
K11 Empowering Workers to Make Improvements
K12 Manufacturing Value Analysis (Methods Improvement)
K13 Efficiency Control
K14 Conserving Energy and Materials
Current processes
improvement /
Reducing inventory /
Faster delivery
K15 Quick Changeover Technology
K16 Reducing Inventory (Shortening Lead Times)
K17 Production Scheduling
K18 Coupled Manufacturing
Technological
development
K19 Using Information Systems
K20 Leading Technology and Site Technology
%ote: table is adapted by authors
Source: Priročnik za svetovalce 20 ključev. 2000. Interno gradivo GOSTOL-TST. Ljubljana: Delotte &
Touche, p. 22 and Jug, K. 2004. p. 18.
As we can see on (Table 4), the keys work in different areas and have a multiple
effects. Thus, some groups of keys increase motivation, some increase quality, while others
reduce costs, but all of them are focused on three main objectives (faster, better and
cheaper).3
Figure 2: The correct way of method development (harmony model)
%ote: figure is adapted by authors
Source: Koch, A. n.d. 20 Keys of Iwao Kobayashi-San. http://www.makigami.info/cms/20-keys-kobayashi.
Accessed: 8th December 2011
3 Faster – Improvement of lead time through lean manufacturing and lean process work; Better –
Improvement of quality through prevention of errors; Cheaper – Optimization of cost through improvement
of productivity and waste reduction.
1036
A very important learning from Kobayashi's approach is to keep as much as
possible balance among the development of the keys and he states we should not develop
one key without keeping track of the others. (Figure 2) shows us how company need to
develop all keys, while on the other hand (Figure 3) shows us the wrong approach.
Figure 3: The incorrect way of method development
%ote: figure is adapted by authors
Source: Koch, A. n.d. 20 Keys of Iwao Kobayashi-San. http://www.makigami.info/cms/20-keys-kobayashi.
Accessed: 8th December 2011
This approach is focused on continuous and sustained improvements and
development. The main idea is that many small steps are much better than a few large.
Improvements are introduced in small doses, and will thus be easier for all employees to
adapt. Author of this approach indicates that improvements are visible and come quickly,
and after six months results will be permanent. One of the best advantages of this approach
is that there is always something to improve at all levels at any time. If you increase some
key, there are some other keys that need to be increased too. Proera, professional education
and management consulting company from Moldova4, presents this approach like a
revolutionary program for enterprise transformation with those key advantages: a.
implement best practices to achieve world class, operational excellence; b. achieve the
strategic goals of the business; c. identify and eliminate all forms of waste (non value-
adding activities) to improve customer satisfaction and market share; d. energize and
motivate all employees to work towards the achievement of goals; e. improve productivity,
profitability and the long-term sustainable competitiveness of the business.
Like any methodology, this method is adapted to the needs of the organization. For
organizations that seek world-class quality and preservation of competitive position, this
method is one of the best solutions. It is important to note that in Bosnia and Herzegovina
this method is not popular yet, and it can be implemented only by using services of
Deloitte consulting company.
Research that was provide on the territory of Bosnia and Herzegovina do not
include implementation of any particularly method or approach which is mentioned, or will
be mentioned in the work, while it was focused on participation of quality issue among
companies. But we will see that some questions are directly related to few parts of some
approaches. At the beginning we tried to determine which of the two marketing mix
elements (price and quality) is more important for companies. For quality we have: M-W =
159.000, p<0.05; Mean-rank 'INT' = 26.55; Mean-rank 'DOM' = 19.33). For price: (M-W =
169.500, p<0.05; Mean-rank 'INT' = 18.98; Mean-rank 'DOM' = 24.44). The medians for
the first claim are: (Md'INT' = 5; Md'DOM' = 4), while for the second (Md'INT' = 1;
4 For more information see: http://proera.md/consulting/consulting_services/20keys/index.html
Md'DOM' = 3). From those results it is obvious, and statistically significant difference
proves, that international companies are much more focus on the quality, and at the same
time domestic companies are oriented to price reduction. Domestic companies’ perhaps
consider that cost leadership strategy will lead them to business success and help them to
attract new customers. It is important to notice that 29% of domestic companies believe
that they can have the best quality and the lowest price at the same time. This is the case
with only 5% of international companies.
15% of international companies believe
purchasing process. An even better indicator (Diagram 1), which tells
dominance of international companies, is that 30% of international and only 4% of
domestic companies consider that their customers do not pay attention to the price when
they are making purchase.
Diagram 1: Does the companies believe that the price has a crucial importance during the
customer purchase?
Source: authors' calculation
One of the Kobayashi’s pillar keys, with aim to energize workplace, is
Improvement of team activities. This key can be identified in s
that we explored how much companies invest re
Diagram 2: The frequencies of external and internal education
Source: authors' calculation
0%
20%
40%
60%
has a crucial
importance
15%
International companies
15
%
0%
0%
10
%
67
%
4%
38
%
17
%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Without
education
Once in
several years
International companies (External)Domestic companies (External)
1037
ose results it is obvious, and statistically significant difference
proves, that international companies are much more focus on the quality, and at the same
time domestic companies are oriented to price reduction. Domestic companies’ perhaps
cost leadership strategy will lead them to business success and help them to
attract new customers. It is important to notice that 29% of domestic companies believe
that they can have the best quality and the lowest price at the same time. This is the case
with only 5% of international companies. On the other hand 38% of domestic and only
15% of international companies believe that price has a crucial importance in customers
An even better indicator (Diagram 1), which tells
dominance of international companies, is that 30% of international and only 4% of
domestic companies consider that their customers do not pay attention to the price when
companies believe that the price has a crucial importance during the
One of the Kobayashi’s pillar keys, with aim to energize workplace, is
Improvement of team activities. This key can be identified in sales process too. Because of
that we explored how much companies invest resources in sales education (Diagram 2).
The frequencies of external and internal education
has a crucial
importance very important
but not decisive not important
for their
customers
15%
55%
30%
38%
58%
4%
International companies Domestic companies
20
%
45
%
15
%
5%
5%
30
%
20
%
30
%
21
%
8%
0%
0%
17
%
8%
21
%
0%
several years
Once a year Once every
half year
Once a
month
Once every
fifteen days
International companies (External) International companies (Internal)Domestic companies (External) Domestic companies (Internal)
ose results it is obvious, and statistically significant difference
proves, that international companies are much more focus on the quality, and at the same
time domestic companies are oriented to price reduction. Domestic companies’ perhaps
cost leadership strategy will lead them to business success and help them to
attract new customers. It is important to notice that 29% of domestic companies believe
that they can have the best quality and the lowest price at the same time. This is the case
On the other hand 38% of domestic and only
that price has a crucial importance in customers
An even better indicator (Diagram 1), which tells us about the
dominance of international companies, is that 30% of international and only 4% of
domestic companies consider that their customers do not pay attention to the price when
companies believe that the price has a crucial importance during the
One of the Kobayashi’s pillar keys, with aim to energize workplace, is
ales process too. Because of
(Diagram 2).
0% 5
%0
%
0%
0%
Once every
fifteen days
Once every
seven days
International companies (Internal)Domestic companies (Internal)
1038
According to the results present in (Diagram 2), it can be seen that international
companies often prefer external and internal education once every half year and internal
education once in fifteen days. Only 15% of international companies do not prefer any type
of education. For domestic companies is characteristic that two thirds had never use
external and 38% had never used internal education.
4.2.3. Six Sigma in sales
Six Sigma is a scientific, systematic and statistical approach to business process
improvement and is considered to be an important business strategy. It was developed by
company Motorola in 1980s as a methodology to improve manufacturing and quasi-
manufacturing processes and settings (Nakhai & Naves, 2009). The main goal of this
approach is to cut costs and boost productivity, while provides continuous improvement
that every company need in today’s turbulent environment. If company want to achieve Six
Sigma that requires transformation of business processes and organizational discipline. Six
Sigma goes light years beyond systems selling (the notion of providing clients with
integrated solutions) and even beyond simple consultative selling. It entails an
organizational symbiosis between a company and its customers, lining up the two
organizations' processes (Niemes, J. 1999:39). The same author emphasizes five steps in
implementing Six Sigma in a sales organization:
1. Think process – how some organization currently operates how it serves clients
and how many business functions need to interact with one other.
2. Forget about silos and stovepipes - implementing Six Sigma principles requires a
strong team effort inside the organization.
3. Develop a passion for measuring how well the company is performing - Six
Sigma is about comparing a company's process outputs to the needs of its
customers.
4. Invest in training and coaching at all levels - putting Six Sigma principles in place
in any organization requires a significant amount of time and organizational
resources. Therefore, employee training, coaching, and mentoring are essential.
5. Senior management must be on the "lunatic fringe" to make this work - a
company's top management must drive the implementation of Six Sigma.
Everyone has to participate in a Six Sigma effort, and that includes salespeople. Six
Sigma methods and tools are particularly well-suited to support the development of an
organization’s global sales capabilities. There are some huge benefits for all selling
organization if they implement this approach (Hesselschwerdt, P. 2003):
1. Significant increases in win rates on competitive bids. Applying this to a large
global industrial company can mean adding billions to the top line as well as
substantially improving the bottom line.
2. Improved customer penetration and retention. By systematically identifying
“critical to customer” (CTC) requirements – the baseline for developing Six Sigma
improvements – organizations ensure that all processes and activities deliver on the
known, measurable elements that ensure customer satisfaction. The result is
increased, customer these and other challenges will be based on an organization’s
specific situation.
3. Reduced non-selling time and increased sales force productivity.
organizations, non-selling time can make up more than half of the available time of
a sales person. Six Sigma techniques focus on identifying and eliminating waste and
non-value adding activities, resulting in significant increases in the time available
for key selling activities.
Successful implementation and organizational application of Six Sigma
methodology have been exploding in the last few years. This approach becomes a very
good driving force for many market oriented companies. Factors influencing
Sigma implementation include management involvement and organizational commitment,
cultural change and continuous training (Sumer, S. 2011:27).
an organization and it will go deep into its fabric and therefore ne
drive behind it. It must be seen as part of a total approach, and it demands a level of quality
competence from the organization before the benefits can begin to be delivered. Quality
improvement methods such as Six Sigma may be very pow
directed and need a clear strategy to measure and interpret its customers’ needs
successfully (Van Iwaarden V.J., Van der Wiele, T., Dale, B., Williams, R., Bertsch, B.
2008: 6756).
One of the requirements related to Six Sigma in sales, set by
retention or attrition rate of customers. Because of that, we explore the rate among
observed companies, and present results in
companies have attrition rate between 0%
domestic. Interesting result is that all international companies are familiar with their
attrition rate, but in the other hand we have 8% of domestic which are not sure abou
percentage.
Diagram 3: Customers attrition rate
Source: authors' calculation
In further research we include all four elements of marketing mix and test inter
correlation status among them. With next question we tried to gain a complete picture of
the capabilities that companies can use on the market and assume perception between
quality on the one side and other elements of marketing mix on the other.
55
%
35
%
29
%
13
%
0%-20% 21%-40%
International companies
1039
selling time and increased sales force productivity.
selling time can make up more than half of the available time of
a sales person. Six Sigma techniques focus on identifying and eliminating waste and
value adding activities, resulting in significant increases in the time available
or key selling activities.
Successful implementation and organizational application of Six Sigma
methodology have been exploding in the last few years. This approach becomes a very
good driving force for many market oriented companies. Factors influencing
Sigma implementation include management involvement and organizational commitment,
cultural change and continuous training (Sumer, S. 2011:27). Six Sigma can revolutionize
an organization and it will go deep into its fabric and therefore needs top management
drive behind it. It must be seen as part of a total approach, and it demands a level of quality
competence from the organization before the benefits can begin to be delivered. Quality
improvement methods such as Six Sigma may be very powerful but they have to be
directed and need a clear strategy to measure and interpret its customers’ needs
successfully (Van Iwaarden V.J., Van der Wiele, T., Dale, B., Williams, R., Bertsch, B.
One of the requirements related to Six Sigma in sales, set by Hesselschwerdt, is
retention or attrition rate of customers. Because of that, we explore the rate among
observed companies, and present results in (Diagram 3). As we see 90% of international
panies have attrition rate between 0%-40%, while this is the case with only 42% of
domestic. Interesting result is that all international companies are familiar with their
attrition rate, but in the other hand we have 8% of domestic which are not sure abou
Customers attrition rate
In further research we include all four elements of marketing mix and test inter
correlation status among them. With next question we tried to gain a complete picture of
the capabilities that companies can use on the market and assume perception between
ality on the one side and other elements of marketing mix on the other.
5%
0%
5%
25
%
21
%
4%
41%-60% 61%-80% 81%-100%
percentage
International companies Domestic companies
selling time and increased sales force productivity. In many
selling time can make up more than half of the available time of
a sales person. Six Sigma techniques focus on identifying and eliminating waste and
value adding activities, resulting in significant increases in the time available
Successful implementation and organizational application of Six Sigma
methodology have been exploding in the last few years. This approach becomes a very
good driving force for many market oriented companies. Factors influencing successful Six
Sigma implementation include management involvement and organizational commitment,
Six Sigma can revolutionize
eds top management
drive behind it. It must be seen as part of a total approach, and it demands a level of quality
competence from the organization before the benefits can begin to be delivered. Quality
erful but they have to be
directed and need a clear strategy to measure and interpret its customers’ needs
successfully (Van Iwaarden V.J., Van der Wiele, T., Dale, B., Williams, R., Bertsch, B.
Hesselschwerdt, is
retention or attrition rate of customers. Because of that, we explore the rate among
. As we see 90% of international
40%, while this is the case with only 42% of
domestic. Interesting result is that all international companies are familiar with their
attrition rate, but in the other hand we have 8% of domestic which are not sure about the
In further research we include all four elements of marketing mix and test inter
correlation status among them. With next question we tried to gain a complete picture of
the capabilities that companies can use on the market and assume perception between
ality on the one side and other elements of marketing mix on the other. Question was
0%
8%
Unknown
percentage
1040
composed like four statements where companies were obligated to rate importance level of
marketing mix element they consider that is most valuable for their customers. Statistical
correlation among these four parameters we can introduce in text form: Quality – M-W =
162.000; p = 0.018 < 0.05; Mean-rank ‘I%T/DOM’ = 26.40/19.25; Md ‘I%T/DOM’ =
5.00/4.00; Price – M-W = 167.500; p = 0.041 < 0.05; Mean-rank ‘I%T/DOM’ =
18.80/25.52; Md ‘I%T/DOM’ = 3.00/3.00; Distribution – M-W = 227.500; p = 0.384 >
0.05; Mean-rank ‘I%T/DOM’ = 21.88/23.02; Md ‘I%T/DOM’ = 4.00/3.00; Promotion – M-
W = 202.000; p = 0.185 > 0.05; Mean-rank ‘I%T/DOM’ = 24.40/20.92; Md ‘I%T/DOM’ =
4.00/4.00. Arithmetical mean results: Quality: I%T=4.70; DOM=4.00. Price: I%T: 2.55;
DOM: 3.25. Promotion: I%T=3.70; DOM: 3.83. Distribution: I%T=3.75; DOM=3.38.
These results unambiguously indicate that international companies pay lot more attention
to quality issue than domestic companies.
4.2.4. Lean management in sales
For a business perspective the term “lean” is used to describe a philosophy of management
which involves a set of tools and techniques used to optimize time, assets, and
productivity, while continually improving the quality of products and services for
customers (Atkinson, C., Linehan M. 2008:3). Lean is about focusing whole team's efforts
to increase the value that needs to be delivered to the customers, while eliminating
uneconomical activities. The shortest definition available in the literature says: “Lean is
about doing more for less." Every business function in the company can be developed
using lean techniques and sales is no different.
Lean approach in different from other approaches in four very important issues
(Headrick, B. 2011):
1. First responsibility is to get your costumers to want what they need,
2. You provide the solution to their pain “just in time” – when they are looking for it,
not when you are doing a big sales push,
3. It involves building relationships that mature and develop over time,
4. It involves low waste activities that are low cost – these activities are measurable,
repeatable and adaptable.
Womack and Jones (2003) have documented in company after company that lean
thinking made it possible to significantly reduce the time to make and deliver a product (or
service), lower costs, and increase the quality and value of what these companies deliver to
their customers. In fact, they confidently state that “if you can’t quickly take throughput
times down by half in product development, 75 percent in order processing, and 90 percent
in physical production, you are doing something wrong.”
In all lean implementations after some steps focus need to be moved to sales function.
This is very common in today’s business environment. The process of implementing will
result with capacity that is freed up, while waste is eliminated. Question is: “What the
company want to do with the available capacity?” Answer is simple. An organization need
to use the available capacity to produce and create more value for costumers by doing
proactive sales activities. This is the main goal for all lean market oriented companies.
For sales process according Lean Managements politics role of relationships is very
important. In our research, driven by the idea of linking functions between the customer
and seller, which is the base for establishing long term cooperation among companies, we
explored current and expected level of these relationships among companies. We used five
1041
functions (departments) in the company: Legal, Finance, Accounting, Marketing and
Purchasing.
Diagram 4: Current and expected relationships level among business functions
Source: authors' calculation
Results analysis, presented in (Diagram 4), which are related to the current
relationships level of linked business function, show that international companies, as
opposed to domestic, most often have linked legal, finance and procurement business
function in the selling process. When we talk about accounting and marketing departments,
there was no statistically significant difference, and we can conclude that both groups of
companies have similar results. It is interesting that the international companies consider
that all departments or business functions should be a maximum involved in the sales
process, while domestic companies consider this only for marketing and accounting
departments.
From the all above, especially from an analysis that directly oppose the perception
of the relation between the price and quality, it is clear that the hypothesis: International
companies, as opposed to domestic, use quality like differentiation tool for building
competitive advantages, is finally confirmed. International companies are much more
oriented towards establishing a high quality system framework through their products and
services, and they consider that this is the only way they can differentiate themselves from
their competitors.
5. CO�CLUSIO�
Today's business environment is very competitive. To be successful, companies need to
plan carefully and work very hard. One of the keys to a successful business is having
knowledge of the market conditions and possibilities. Companies often spend copious
amounts of time and effort developing a business and sales strategy. Current market
conditions are important when selecting sales strategy because customer needs fluctuate
depending on a lot of factors. This paper deals with three separate topics, which are
3,0
5,0
1,0
2,0
2,5
4,0
1,0
2,0
3,0
3,5
1,0
1,0
2,0
3,0
1,0
1,0
2,0
4,0
1,0
2,0
0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0
Median INTERNATIONAL COMPANIES
Median DOMESTIC COMPANIES
Median INTERNATIONAL COMPANIES
Median DOMESTIC COMPANIES
CURRENT
RELA
TIO
NSHIPS LEVEL
EXPECTED
RELA
TIO
NSHIPS LEVEL
Legal Finance Accounting Marketing Purchasing
1042
strongly associated to each other, and highly related with the role of quality. At first we
analyzed employment supply in four ex-Yugoslavian countries.
In a turbulent business environment, the natural tendency among business sales
leaders is to hire more sales representatives, but this is exactly the wrong thing to do. This
is only short term strategy, and there are few reasons for this theory. At begging new sales
representatives are new cost centers, and we are not sure about their skills. Like additional
problem we have unwillingness of companies’ management to invest resources in sales
team education. This just proves that the companies, in an effort to overcome the
difficulties of the economic crisis, react quickly and without planning, which leads to the
creation of even larger problems. Short research had done using information from four
countries, shows that companies in this area are making this mistake. Companies must
begin to set long term goals, and plan their activities in accordance with market demands.
The second part of the paper put the emphasis on the importance of recognition a
quality as a crucial factor of business development, both for individual companies and
entire economies. ISO Standard is not a guarantee of success anymore. Measuring the
intensity of ISO Standard we sow that Bosnia and Herzegovina ranks highly sixth place
among thirty-two countries. This is a very good result, but domestic companies need to
improve and upgrade their quality system if they intend to be competitive on the global
market.
At the end we presented few approaches for quality improvement and provide the
results of research done on the territory of Bosnia and Herzegovina. Approaches are
observed quite closely, just in the area of sales function, and we linked them with the
results obtained from own research. It is evident that there is lot of options for companies,
and global picture of quality perception is also available. After all of this we come to
conclusion that companies have a great opportunities for improvement, that lot of issues
need to be improved, and they need, as soon as possible, to recognize the values and
elements that need to be developed. Steve Jobs once said: "Be a yardstick of quality. Some
people aren’t used to an environment where excellence is expected."
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