price war

noun

Definition of price war

: commercial competition characterized by the repeated cutting of prices below those of competitors

Examples of price war in a Sentence

The airlines are engaged in another price war.

Recent Examples on the Web

With net inflows slowing, price wars raging and many of their stocks lagging, asset managers including BlackRock need to find new ways to expand. WSJ, "The Money Managers to Watch in 2019," 1 Jan. 2019 In tandem with the rise of ecommerce, hydraulic fracturing (fracking) technology began wiping out the global balance of energy supply and demand, unleashing massive price wars. Dave Margulius, Fortune, "Commentary: Inflation Shook the Markets This Week—But Deflation Is the Force to Watch," 8 Feb. 2018 The company was grappling with heavy debts and a price war in the U.S. generic-drug market, sparked by consolidation among pharmacy chains and the influx of new competitors. Denise Roland, WSJ, "King of Generics Pushes Into Biotech Drugs," 13 Feb. 2019 The development highlights the increasingly contentious economics of the asset-management industry, which after years of strong growth and improving profits now finds itself in the grip of a deepening price war. WSJ, "Investors Find Few Places to Hide in Rocky Year," 18 Dec. 2018 Virtual reality is seeing a very real price war take place. Chris Morris, Fortune, "HTC Cuts the Price of Its Vive VR Headset," 19 Mar. 2018 Chasing Growth Jio's subscribers and market share have expanded, but an industrywide price war has cut into revenue. Newley Purnell, WSJ, "Two Years Ago, India Lacked Fast, Cheap Internet—One Billionaire Changed All That," 5 Sep. 2018 But a glut of tonnage in the water and vicious price wars have pushed freight rates well below break-even levels over the past few years, sinking most operators deeply into the red and pushing some out of business. Costas Paris, WSJ, "Japan Catches Up With Shipping Consolidation," 11 May 2018 Bluegogo halted operations last November, a year after its founding, due to a capital crunch amid stiff price wars. Clay Chandler, Fortune, "Hollywood's China Challenge," 6 Jan. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'price war.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of price war

1895, in the meaning defined above

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Last Updated

17 Mar 2019

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Time Traveler for price war

The first known use of price war was in 1895

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More Definitions for price war

price war

noun

Financial Definition of price war

What It Is

A price war is an event whereby two or more companies continually lower prices to undercut each other.

How It Works

Airline companies are famous for their price wars. If Airline XYZ cuts the price of a flight from Los Angeles to New York from $800 to $700, Airline ABC, which is competing for business on that route, might cut its fare to $650. Airline XYZ might respond by lowering its fair to $625, and so on.

Why It Matters

Engaging in a price war is a competitive strategy, usually to capture market share. Falling prices tend to attract more customers. Some companies may choose to sell a product or service at a loss, however, in order to capture market share and outwin competitors. In some cases, this might lead to antitrust violations.

Source: Investing Answers

price war

noun

English Language Learners Definition of price war

: a situation in which companies or stores compete with each other by lowering their prices on goods or services in order to attract more customers

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