How price wars really start
Contrary to management opinion, most price wars are not strategic exploitation of market growth potential or cost advantage. Most begin where one competitor misinterprets a competitor’s actions or acts and fails to consider the likely response of rivals. The price war may start when Company A cuts prices in one city to clear obsolete stock and Company B sees this as an industry-wide price assault and responds aggressively. Both will believe the other started the war.
The 2002 tabloid newspaper price war in the UK began when the Daily Star cut its cover price to 10p to increase readership. The Daily Mirror saw the opportunity to encourage its infrequent readers to buy it every day and slashed its price to 20p. The market’s ...
Get Smarter Pricing: How to capture more value in your market now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
