Competitive Analysis: "Flanking in a Price War"Article ReviewThe article "Flanking in a Price War" discusses how an economic experiment and data were used effectively in the Quebec food industry. The beginning of the article provides an overview of the history of the industry, introduces the major players, and describes how one company in particular, Steinberg, used a price-cutting strategy to become the dominant player for 30 years. climate that transformed the competitive environment from one of near perfect competition to the oligopoly that existed in the 1980s. This was followed by several examples of how local legislation and environmental factors enabled many small independent stores and chains to stay in business and capture market share. By 1983, it became apparent to most observers that a price war would soon ensue, most likely initiated by Steinberg. A company, Hudon et Deaudelin, wanted to prepare for such a price war and commissioned a study based on pricing experiments. In summary, the experiment was carried out and found that there were different price elasticities for different products. The difference was mainly in the ability of the products to be stored for long periods and that by increasing the prices of in-stock items and lowering the prices of non-in-stock items one could minimize the margin loss and continue to finance the Price War. When the price war finally broke out, Steinberg used an unusual tactic instead of cutting prices. It offered a discount for every dollar spent that could be applied to the customer's next in-store order. This was accompanied by a new focus on customer service that required several hundred new employees. Two of the other large companies immediately followed suit, in a competitive response, while Hudon and Deaudelin implemented the price reduction measures proven by the pricing experiment. These new prices were imposed thanks to a strong advertising campaign. This tactic not only offered the smallest margin reduction among competitors, but Hudon and Deaudelin were actually the only company to gain market share from the 14-week price war. These results were a vindication for economists and proved the value of economic theory in business. The experiment carried out consisted of manipulating the prices of a set of 72 grocery products over a period of six weeks. Products have been classified as goods in stock or goods not in stock..