I've worked in a very competitive business for 20 years. As much as we always promise we won't participate in cut-throat competition, it always turns out that way. We try to focus on our new designs where profit is higher because head-to-head competition doesn't yet exist. But the edge doesn't last long before competitors have alternatives to offer customers and the cutthroat competition cuts the profit again. We stay in a market until the net profit is down to 8%-9% and then we exit. That is the reality I've observed over 20 years.That's basic supply and demand. Competitors enter your market raising the supply and lowering the price. Your price goes down even though your costs didn't. You didn't want to lower your price - you had to.
But the edge doesn't last long before competitors have alternatives to offer customers and the cutthroat competition cuts the profit again.Sorry but based on that sentence it doesn't sound cutthroat. It sounds like you have an overpriced low quality (maybe one of a kind for awhile) product and your competitors know it. I'll bet they can't wait for your next new product... BONANZA! for them. Why don't you reduce your pay so you can lower your price to increase your sales? That's what you preach here.
Not being satisfied with net 8 or 9% profit or not willing to "offer alternatives" (IOW compete) sounds whiney and greedy, but since it's worked for 20yrs, so be it...hopefully it will last.