Measuring ” deliver value-for-money solutions”

Yes, ‘value for money’ must mean from a customer’s perspective.

Part (a) asks for an evaluation of the reporting system and evaluation means looking for pros and cons, strengths and weaknesses. It is clear, for example, that no measures are presented for innovation at all.

Your query arises from the paragraph in the answer:

“An indirect measure of the customer value-for-money is being offered through the gross profit which, when compared to the industry average, gives a partial measure of value but without data on the price/quality mix compared to competitors, it is difficult to be conclusive about this. Revenue growth is given but should be compared to industry growth in order to give an impression of the attractiveness of our offering to the customer.”

GP is certainly not a direct measure of value-for money offered to customers. GP and revenue growth might be indirect measures as they imply success at delivering good products to customers (including ‘value for money’) otherwise customers would not return and the firm’s reputation would be damaged.

Value for money does not mean cheap; it means a comparison of price and product and it can only be assessed by customers. The only direct measures possible must take customers’ views into account. Therefore, some sort of customer satisfaction survey might help. Another measure could be comparing Rezillos’s prices to the prices of comparable products and services offered by competitors. However, it would see that many of the company’s products might be specially made for customers and comparing prices to competitors’ will be difficult if there are no standardised price lists. Even more difficult would be comparing the quality and efficiency of the products as that will depend on customers’ views.