1. Reduced Margins: Continuous price reductions can erode profit margins, making it unsustainable in the long run. 2. Quality Compromise: Companies may cut costs in ways that affect product quality, leading to customer dissatisfaction. 3. Price Wars: Intense price competition can lead to destructive price wars, harming industry profitability. 4. Market Perception: Excessive focus on price can damage a brand's perception, making it seem like a low-quality option.