Definition

1. Noun:
   • A form of intense commercial rivalry where businesses primarily attempt to gain market share or customers by offering lower retail prices than their competitors. This type of competition focuses on price as the main or sole factor for attracting business, often leading to price cuts and price wars.

Usage

• Price competition is a common strategy in markets where products or services are very similar (commoditized). It is the opposite of competition based on factors like quality, features, or brand reputation.
• It is typically used as an uncountable noun to describe a market condition or business strategy.
  • Example: The smartphone market has moved beyond simple price competition to include innovation and camera quality.
  • Example: Supermarkets often engage in fierce price competition to attract weekly shoppers.

Examples in Use

• Noun:
  • The new store's strategy led to intense price competition in the neighborhood.
  • To survive in the industry, the company had no choice but to participate in price competition.
  • Analysts warn that relentless price competition can erode profit margins for all firms involved.

Advanced Usage

• "to engage in price competition": to actively compete by lowering prices.
  • The two airlines are engaging in brutal price competition on the transatlantic route.
• "fierce/cut-throat/intense price competition": used to emphasize the severity of the competitive pressure.
  • The market is characterized by cut-throat price competition, leaving little room for new entrants.

Variants and Related Words

• Price war (n): An extreme and prolonged period of price competition where companies repeatedly lower prices to undercut each other.
  • The launch of the budget brand triggered a price war in the sector.
• Competitive pricing (n): The strategy of setting prices based on what competitors are charging.
  • Their competitive pricing strategy helped them gain market share quickly.

Synonyms

• Price war (though this implies a more intense and aggressive state).
• Cost competition (similar, but can focus more on underlying production costs).

Related Phrases

• "Race to the bottom": An idiom often associated with intense price competition, describing a situation where continuous price cutting leads to lower quality, wages, or standards.
  • The constant discounting resulted in a race to the bottom that hurt the entire industry.

Noun

1. intense competition in which competitors cut retail prices to gain business