This article examines how firms can develop a competitive defense strategy that minimizes both the self- and competitor-inflicted damages of price competition. It explains that before acting to defend market share or initiate price cuts, managers must anticipate the long-term strategic consequences and weigh them against the short-term benefits. A pricing decision should never be made simply to make the next sale or meet some short-term sales objective, but to enhance the firm’s long-term ability to operate profitably. Pricing is like playing chess. Those who make moves one at a time seeking to minimize immediate losses or exploit immediate opportunities will invariably be beaten by those who envision the game a few moves ahead. Read article for further discussion. [BNET Annotation]
Authors: George E. Cressman Jr., Thomas T. Nagle
Source: Strategic Pricing Group
Subject: Marketing / Sales
Click to Add the First »