In 2020, guarantee providing S&P 500 companies compensated a full of $twenty.two billion to include their customers’ guarantee promises, with the common guarantee payments staying $246.one million (in accordance to Calcbench). The probable financial implications of guarantee promises are unable to be disregarded. For occasion, in 2012, Navistar faced the danger of bankruptcy largely because of to the monumental financial burden of its guarantee contracts.
In a forthcoming review, my colleagues and I examined whether or not and how providing warranties and surprising alterations in guarantee payments have an affect on company value. Our findings supply crucial implications for C-suite executives and are applicable to functionality measurement choices.
Does providing warranties do the job successfully as a internet marketing software? Prior literature presents blended proof relating to whether or not guarantee contracts aid companies sign far better product top quality to probable shoppers. Earlier research have documented that appliances marketed