Is cutting price of your product / service a good option?

Though at a first glance it looks like an effective way to manage your low cost competitors, on a long term it may not work out as you cannot survive if your premium product / service doesn’t have a market and / or your cost is very high to sustain profitability.

The below flow chart from an article published in HBR – “Strategies to Fight Low-Cost Rivals” is very interesting.  There are enough examples in real world to map like Intel & Apple managing AMD & other computers manufacturers by effective differentiation, Kingfisher acquiring Air Deccan, Singapore Airlines low cost venture Tiger Airways, Wal-Mart which pioneers the low cost model, 3M with its innvoative products etc.

Now coming back to our company, send your inputs to on effective ways of differentiating our products & services


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