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Surviving a Competitive Price War: 5 Best Practices

In the business world, the prices of commodities often change. This usually stems from the unstable market forces as a result of the recent recession slump. The increasing pressure to keep sales high forces business owners to slash their prices in an effort to recoup their losses. This is what instigates price wars.

Price wars generally start as firms are fighting for a larger market share in a declining market. Some firms become so desperate that they initiate aggressive growth strategies. These firms believe that by driving their competitors out of business, they will be able to assert themselves in a dominant position in the market and dictate the prices. In theory, this is one way to get a larger piece of the market pie however, more often than not, they forget to think about how their competitors will respond. There are generally two actions you can take: to respond or to ignore it. The best way to survive a price war is to avoid it; however, there are times when you have to take certain measures to defend your business. So how exactly can you do this? Read More…

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