Competition

Let me tell you a little bit about competition...
there is good and bad competition in perspective of the industry as a whole.
Good competition helps the industry grow and prosper,
while bad competition destroys the industry's margin and makes it unattractive.

What is considered bad competition? Well pretty much everything that is aiming
at gaining market share in the short run through price cuts that can be easily matched
by other companies in the industry. Often times company owners believe they can gain market share by giving a 5% discount for 30 days but guess what most of the time the competitor can do the same thing since the cost structure for both businesses are very similar.
Now do you believe that the challenged company will simply extend a 5% discount or will they counter your offer with a 7% discount????
This behavior will lead to spiral of destruction where competitors will try and gain market share through price cutting... who wins? the customer.. they get a great deal on the cost of the
industry margin.
For companies this means a loose-loose situation. Once they hit the price floor they will both remain with the same market share they had before the fight started.

So next time you consider cutting prices make sure you do not hurt the industry and yourself!
Rather try and find advantages that competitors can not so easily copy!