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If you are competing based on price, you are in a race to the bottom.
To understand why having a strong Unique Selling Proposition (USP) is important, you simply have to visit any shopping mall and take a look around. How many clothing retailers do you see? How many cafes? Opticians? Bookshops?
Chances are, there are more than one of each. And if you look closer, you will discover that they are offering very similar products and services. What has made things worse is that with the proliferation of e-commerce sites like Amazon, many of these retailers are not only competing with the shops in the same mall with them, but with an e-retailer located in another part of the world — where favorable exchange rates make it cheaper to buy online.
Avoiding a Race to the Bottom
In today’s hyper-competitive, internet-connected and globalized business environment, few businesses are truly unique. Thus, unless you can effectively define what makes your company’s product and service unique, you will blend into the sea of homogeneous competitors. And without something to differentiate you from your competitor, you will invariably be forced to compete based on price.
As a price war is fundamentally a race to the bottom by seeing which business can offer the…
