Seth Godin wrote a post about price pressure. In it he proposes, that if people are asking for a lower price, you are not providing value and providing that value is your choice. Choosing the path of lower prices and commoditization is your alternative choice. I found this thought provoking.

This could be perceived in contrast to a previous post I did some time back about embracing the challenge of commoditization. That said, I think there is a big difference between internally looking for improvements and new ways to provide value in an increasingly competitive market and marketing yourself externally as the Arco of your segment. You can look for efficiencies, while delivering value for the money you are charging. Stay ahead of that curve (on both fronts) and you have a great business.