When you make a decision, whether in your personal or professional life, you should be asking:
If I do this, what might happen?
If I do that, what might happen?
Which is the better option?
If you are faced with the unwelcome news that your primary competitor has reduced their prices by 15% and is going after your customers, you have to decide what to do about it.
There will be options, each with a range of possible outcomes. In fact, for each option, there will in all likelihood be multiple things that might happen.
For example, if you match the price increase, that might (and might not) prevent your customers fleeing to the competition. There’s an outside but unlikely chance that you might be able to snatch a customer or two of theirs. You might be able to gain the customers of other competitors who, until now, have competed based on price alone. But it’s almost certain that your revenue will drop and your cash flow will ebb. The domino effect of a reduction in cash flow might be significant in several ways. Maybe you will have to slow or cancel other business projects, such as the purchase of a new system for trade compliance. Maybe your sales representatives will see the potential loss of commissions as an incentive to leave.
Several things might happen, and work has to be done to assess the range of…
