If possible to provide an organically lower price for a premium service, is that a problem?

[Fightrepreneur]

MJ and others have discussed how "adding value" by undercutting competitor prices is a poor long term business model because it will become a battle for increasingly slimmer margins because of a price war. But what if your business model allows you to make profit while offering the same service at a lower cost than the competitors?

I am starting a service-oriented business that is often offered by other larger companies but isn't generally their main product. I am targeting a niche that I believe is generally priced out of this service, and I believe I can offer a better price/better deal structure because my costs will be lower, as I will specifically be targeting this service.

Is this dangerous long term?

 

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