Always Be Prepared for Competitive Rivalry

Every industry has a high-end and low-end participant. In most cases, if a low-end competitor comes into your territory, there’s a belief that lowering your prices or price matching will help you retain clients. But is that the only alternative? Most of all, will the reduced prices put you out of business?

I thought about this as I read, “Not Copying Wal-Mart Pays Off for Grocers” in The Wall Street Journal’s June 6 edition.

Many stores, including independent grocers, closed their businesses due to big chain infiltration. But others revamped their focus, catering to customers differently than the overly-crowded competition.

But the survivors rallied by redesigning stores, introducing a more relaxed shopping experience and marrying low-priced staples with higher-margin breads, meats and wine.

How would you react if a company selling similar products or services came to town? Value-added services is one option. Extended hours on certain nights or during the customer’s busy season is another. And a look at your rates to see if an adjustment is required is another smart, tactical approach.

Lowering your prices as a knee-jerk reaction will do more harm than good. Plant a solid foundation of service, and you’ll stay solvent no matter who comes to town.

NOTE: If you cannot open the above article link, go to www.wsj.com and type the article’s title into the site’s search box.

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