In the UK we have a shop where you can buy anything for under a pound, it's called Poundland. Everything is very cheap: the shop, the service, the surroundings, the infrastructure, etc.
Poundland have it sorted.
They've got supply chains for the tat that they sell, they know how to work a system where they don't pay very much in heating or lighting or money, and they sell an awful lot of things for under a pound, most of which people don't need.
If you decide you want to go up against Poundland, you're going to find it difficult, and the only way you're going to do that is what? Call yourself half Poundland?
How do you beat Poundland at the Poundland game?
When price becomes the only differentiating factor in a business, the only weapon you have is to be cheaper.
When you do that, everyone races to the bottom, and when you get to the bottom, you can't go any cheaper because you go out of business, and then you finish second from the bottom and finishing second from the bottom in a race to the bottom is the worst place you can be (you will probably go out of business or your life will be miserable).
And so you can't undercut Poundland, not really with any sort of predictability, so don't try.
Obviously, the race to the bottom isn't just a race against Poundland; being unique is the only way you can win and start to race to the top.
Blog Post Number - 3992