Abstract

In October 2003, leading Dutch supermarket chain Albert Heijn slashed prices up to 30% on more than 1,000 items to counter a loss in market share caused by consumer perception of high prices. AH continued the strategy for the ensuing three years, forcing competing supermarkets to match the markdowns or risk customer defections. Game theory adherents and analysts questioned the strategy, noting price wars often jeopardize profits of both individual companies and their industries. In this two-part case students analyze the risks and benefits of pursing a price-cutting strategy, considering profit margins, market-share data, and select financial information for AH and its competitors.

View research

Citation

Dessein, Wouter, and Remmelt De Jong. Albert Heijn: Price War among Retailers. New York: CaseWorks, February 8, 2010.

Each author name for a Columbia Business School faculty member is linked to a faculty research page, which lists additional publications by that faculty member.

Each topic is linked to an index of publications on that topic.