!! The Hidden Costs of Bidding
Entering a new market against competition carries risks and costs, some of which are not immediately obvious. Reference 1(a) identifies eight hidden costs of bidding:
# You probably won't win - is this the best use of your time?
# If you win, the price may be too low for profit.
# Your competitor may retaliate by undercutting you with your current customers.
# Either way, the market price for your goods or services gets reduced - current customers demand price cuts.
# Impact of lower price on new customers.
# Competitors will benchmark against your new, lower price.
# You may give your customers' competitors a better cost position than your customers.
# By reducing the profits of your competitor you reduce their inhibitions about agressively targeting your customers.

!!Notes
CategoryStrategy
!!References
# [CoOpetition]
(a) pp 84-87