The business-to-business cleaning supply company,Ecolab,encouraged a leading competitor,Diversity,to adopt a strategy to go after low-volume,high-margin customers.What Ecolab knew that Diversity did not is that the high servicing costs involved with the segment makes it unprofitable.Ecolab bid high enough to lose the contracts to Diversity but low enough to ensure that Diversity lost money.According to the Stalk and Lachenauer book,this is an example of the strategy to

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While many hardball strategies are subtle and indirect, raising competitor costs is not. This is a full-frontal attack whereby a firm commits significant resources to a major campaign to weaken rival positions in certain markets. Firms must be sure they have the mass and stamina required to win before they declare war against a rival.

The Business-To-Business Cleaning Supply Company,Ecolab,encouraged a Leading Competitor,Diversity,to Adopt a Strategy