Question

Price competition is intense in the fast-food, air travel, and personal computer industries. Discuss a recent situ- ation in which companies had to meet or beat a rival’s price in a price-competitive industry. Did you benefit from this situation? Did it change your perception of the companies and/or their products?

Answer 1

Mc Donald’s recently came up with offers like ‘Create of taste’ option that enabled the customers to customize their own burgers. However, the input cost of the burgers rose owing to the high customization factor and that lead to making the burgers, at times, even costlier than the earlier ‘Meal’ prices for the customers. Also, in spite of an inclusive menu, the wait time for the customers had been more and it did not thus proved to be a budget-meal in most of the cases. Owing to such reasons, McDonald's stumbled in this effort than its competitors such as Tim Hortons.

I took the benefit of this Price war situation which was directly with its competitors like Tim Hortons and Burger King to capture higher market share. Tim Hortons, introduced traditionally, the concept of 'Brunch' that has been significant, thus demanding a 'Breakfast menu' all day long. The scope for Tim Hortons to beat Mc Donald’s laid in the fact that it could hence avail the benefit of Breakfast menu all through the day and pass the benefits to customers like me. Hence when Tim Hortons emphasized upon the growing awareness of Nutritional food products in its product lines, especially with that of Lunch menu, soups or baked products, which Mc Donald’s fails to offer, I sought the advantage of the competitive prices. However, my perception has not changed much of the companies because end of the day, even I know for fact that more than our health, these Companies are focusing upon market share and profitability. To me, it is just the taste and the product line that matters as against the price that I pay for it.