Issue link: http://psai.uberflip.com/i/1164957
W EEKLY EDITION SEPTEMBER 11, 2019 Pri ce W ar s: Don't be Tak en Pri soner Par t I By Karleen Kos, PSAI Executive Director On a related note, a portable sanita tion company's direct competitor often shares similar technology and speaks to the same customer prospects; they are important challengers for business. At the same time, you and your most direct competitor may co - exist quite peacefully. You might even lik e one another personally and avoid starting a price war because you both know it would drive down profits for everyone. That doesn't mean you're out of the woods though. Indirect competitors that satisfy customer needs through the use of different techno logies probably have completely different cost structures. They, too, can also be dangerous to your bottom line. For example, if you have the contract for large state or national parks, have you examined what companies offering composting toilets, dry toil ets, and other "green" options that don't require frequent pumping have to offer? Do you know how their prices for a season's worth of service in the park would compare to yours? Do you know what variables make their costs go up or down? You need this info rmation to be ready for price wars and competition from these "unusual suspects." You might even find options for your own business in doing the research. The point is, not all price wars and competition are directly in front of you. Know what may be on yo ur flank as well, and be prepared to deal with price competition from those sources also. • Consider the Impact of Outside Influences . It is also critical to pay attention to the behavior of other stakeholders in the industry. Their actions can play a role in a price war as well, perhaps unintentionally. For example, suppose a large portable sanitation company is able to cut a deal with a supplier of equipment, deodorizer, or fuel. Such a thing could dramatically lower that competitor's costs of operation an d give them more room to cut prices to customers. This makes things hard for smaller companies unable to secure such discounts in the short run. However, the deal is a double - edged sword. The supplier risks vulnerability to the larger company's ongoing c oncession demands to keep the sales of supplies up. The supplier is also vulnerable to the wrath of smaller companies who, seeing the big company exclusively using their products – and maybe even deducing that an attractive deal makes their price cutting p ossible -- decide to go elsewhere for their own supplies. P AGE 11 CONTINUED ON PAGE 1 2