Bill Myers

Recently, McDonalds, home of famous Big Mac hamburger, posted its first quarterly loss - amounting to $343.8 million dollars.

Much of this loss can be attributed to two things . . . a price war with Burger King, where both chains offered loss-leader $1 meals, and a general perception among consumers that McDonalds meals weren't very satisfying.

The problems at McDonalds are the result of poor choices. Instead of listening to their customers and improving the quality of the product, McDonalds listened to their competitors and reduced the price.

And this caused the first ever loss at the home of the Golden Arches.

Moral: When you get into a price war, you are letting your competition choose your business model.

Better to compete on quality than on price. Your competitors will have to work harder, and your customers will appreciate your effort.