Chapter 6
Price Competition
Managing Conflict Thoughtfully
The fifth element of the Value Cascade is the Price Competition Gap. Such a gap occurs when a firm makes pricing decisions that fail to anticipate the response of competitors to those decisions.
Ironically, there is little issue here for firms that operate in markets with so many competitors, each with a small market share, that there is no potential to manage it. Those firms need merely remain alert to changes in market prices, the “reference value” described in Chapter 2, and adjust prices quickly, as described in Chapter 7, when the reference value changes. Managing price competition becomes more challenging, and an unnecessary “gap” in profitability ...
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