How and Why Chinese Firms Excel in 'The Art of Price War'

• Main Author: Knowledge@SMU
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2006
• Subjects: Business; Marketing
• Online Access: https://ink.library.smu.edu.sg/ksmu/304; https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1303&context=ksmu
• Institution: Singapore Management University

When it comes to price wars, Wharton marketing professor Z. John Zhang can't help but notice that companies in the West and companies in China are quite literally worlds apart. In the West, Zhang says, the outbreak of a price war is viewed as the failure of managerial rationality. In China, the outbreak of a price war is considered a legitimate and effective business strategy. In a recent paper, Zhang and Dongsheng Zhou, a marketing professor at the China Europe International Business School in Shanghai, analyze two price wars that took place in China in the mid-1990s.