When formulating a response to a competitor's price reduction, firms should consider their offering from the perspective of its overall value proposition to customers.

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When responding to a competitor's price reduction, firms should not only focus on matching or undercutting the price but also consider their overall value proposition, which includes factors such as product quality, customer service, brand reputation, and convenience. By emphasizing their unique value proposition, firms can maintain their competitive advantage and differentiate themselves from their competitors beyond price alone.

When Formulating a Response to a Competitor's Price Reduction, Firms