Price-based competitive strategy
A price-based competitive strategy uses the price offered relative to alternatives as a significant basis for attracting customers. It can involve a low-price offer or a particular balance of price and perceived value. It requires attention to costs, margins, demand and rival responses. A low selling price does not itself prove cost leadership, and a price cut without a viable cost or value proposition can damage results.
Worked example
A retailer offers a simpler service at a lower price than full-service rivals. It assesses whether the reduced service costs and expected demand can sustain the offer, rather than assuming lower prices always increase profit.
Common mistake
Equating a low-price offer with cost leadership, or recommending a price cut without considering contribution, quality and competitor responses.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Supporting | September 2026–June 2027 |
| ACCA | SBL | Direct | September 2026–June 2027 |
| FIA | FBT | Supporting | September 2026–June 2027 |