Understanding the price strategies a competitor uses will assist a business to be financially viable by:

Identifying Market Trends: Understanding a competitor's pricing strategy can help a business identify market trends. If a competitor is consistently lowering their prices, it could indicate a saturated market. On the other hand, if a competitor is raising their prices, it could mean there is increased demand for the product or service.

Setting Competitive Prices: By understanding what competitors are charging, a business can set their own prices competitively. This doesn't necessarily mean matching or undercutting competitor prices, but rather pricing in a way that offers value to customers while still ensuring profitability.

Highlighting Unique Selling Propositions: If a business's products or services are priced higher than their competitors, they need to justify this to their customers. Understanding competitor pricing can help a business highlight what makes their offering unique and why it's worth the extra cost.

Planning for the Future: Understanding competitor pricing strategies can also help a business plan for the future. If a competitor is planning to drastically lower their prices, a business might need to consider how they can reduce their own costs to remain competitive.

Making Strategic Decisions: Finally, understanding competitor pricing strategies can help a business make strategic decisions. For example, if a competitor is pricing their products very low, a business might decide to target a different market segment with higher prices and more premium products.