The process goes something like this: you sell widgets. You are the only company selling widgets. Some other companies enter the widget market. They undercut your price. But yours are the original, superior widgets, so you charge a premium for them. More competitors enter the market. The price drops more. Suddenly widgets are cheap. Your brand value is eroded - people figure out that all the widgets are substantially the same and besides, even if your widgets are better made than everyone else's, it no longer matters - they're cheap enough to throw out and replace when they break.
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