Instructions:

Understanding Price Wars: Begin by providing a concise explanation of what price wars are in the context of business competition. Highlight the disruptive nature of price wars and their potential consequences for firms.

Analysis of Price Wars: Using Porter's Five Forces framework, analyze why price wars are more likely to erupt in certain industries $($e$.$g$.,$ automobile industry$)$ and less frequently in others $($e$.$g$.,$ diamond industry$).$ Discuss how each of the five forces contributes to this phenomenon across these industries.

Case Studies: Provide real$-$world case studies or examples of price wars in both types of industries $($e$.$g$.,$ automotive and diamond industries$).$ Analyze the specific factors and competitive dynamics that led to these price wars.

Strategic Responses: Explore the strategies that firms can adopt to discourage price wars or be better prepared for them. Share proactive measures to prevent price wars and reactive strategies to navigate them effectively.

Industry$-$Specific Insights: Highlight industry$-$specific insights and considerations. Discuss how differentiation, branding, or product innovation can impact a firm's ability to withstand price pressure.

Risk Assessment: Assess the risks and benefits of different strategic responses to price wars. Discuss the potential consequences of various choices on market positioning and profitability.