HIO,
From the perspective of a pricing and inventory man (my area of current employment), a price war is a hell of a lot of fun, and IF managed properly can lead to great long term dividends for the perpetrator.
HOWEVER, the history of price wars is littered with the destruction of those who started them. I can tell you that price wars get ugly and rarely lead to the end that those who engage in them expect. They are exceedingly difficult to manage and maintain.
In addition, from a marketing standpoint, if your brand is labeled a "low cost" brand, REGARDLESS of its quality, it will suffer long term negative impact.
Good luck to Michael Dell for choosing this road. I, for one, applaud MC for not following him too quickly down the low-cost path. It's a bumpy and uncertain one. |
