If a company is entering a market with a new product or service and a main goal is to undercut the competition’s price, that company is starting to lose the battle, before it can even begin. The only direction from there is to fail! As a general rule, outpricing the competition should never be the USP of any startup product or service. That should be a clear understanding before one even speaks about pricing as a startup.
If the company has an established product or service and strong competition, then looking at lowering prices as a competitive advantage might be ok. However, I’d rather think that if everything is being done right, a company can still have higher prices and be very successful. I look at Apple as a good example!