Going after market share with a low price strategy may look attractive in a competitive environment with no clear differentiation between the products. But when price is the only appealing factor, companies stand to lose value in a spiraling price war. The lure of market share is more prevalent in consumer products where companies are destroying value and commoditizing their premium brands with price cuts.
The newly appointed CEO, Paul Polman, of embattled Consumer Products maker, Unilever, has this to say about his strategy:
We are not going to have a mentality to grow at the expense of others
He was quoted as saying that he would avoid fighting for market share at any cost, a trap that lead companies to cut prices too steep or chase low-margins products.
Mr.Polman nailed it.
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