In a competitive marketplace, customer satisfaction determines the market share for each supplier, and ultimately it determines which suppliers of products or services survive. Any marketplace with multiple suppliers favours the customer, and customers demand quality products and services that meet acceptable standards.

For a company to have a competitive advantage over other companies that offer similar products or services and compete for the same set of prospective customers, it must be capable of replicating the products or services it offers to some prescribed ‘standard’ or measurement yardstick.

There are thousands upon thousands of standards that are invisible to most consumers and their vast number alone suggests that the world needs standards, hence the need for industries to implement standards in their operations in order to be successful. When used by industry, standards can work to:

* Promote market efficiency and expansion;

* Foster international trade;

* Encourage competition and lower barriers to market entry;

* Diffuse new technologies and

* Protect consumers against unsafe or substandard products.

But standards on the other hand can be exploited, for they can be used by unscrupulous manufactures to:

* Raise transaction costs and barriers to trade;

* Constrain innovation and entrench inferior technologies; and

* Hinder the development of interoperable systems.

From the perspective of individual firms, poor or indeterminate standards can raise their costs, compromise their quality, and constrain their market position.

Globalisations have made international standardisation the focus for many countries, and its pursuit has been taken up in Regional and World Trade Agreements. The most significant of these agreements, perhaps is the Technical Barriers to Trade Agreement, which is part of the World Trade Organisation Treaty signed in 1994. Among other things, this agreement – known as the TBT Agreement – commits the Governments of more than 130 nations to give preference to international standards as a basis for their technical regulations. In addition, the agreement encourages national and regional standards developers, to use international standards in their activities.

The foreseeable future will move more and more towards international markets because of new market opportunities being created by the radical changes that are taking place on the world political scene such as: The dissolution of the Soviet Union, Deregulation and privatisation of formerly nationalised industries are occurring at a rapid pace throughout Latin America and parts of Asia and Africa, and China, which has gradually lessened its political and economic restrictions. Conformance to international standards will be an important step in the success for all organisations.

Look out for part two next week.

For further information, please contact GNBS on telephone numbers: 219-0062, 219-0064, 219-0065 and 219-0067. You can also check the Bureau’s e-mail at gnbs@networksgy.com