A no-frills provider takes advantage of or creates a true discontinuity by providing a widespread, low price/low cost, undifferentiated product or service. In the marketplace, both older and newer players respond as basic economic theory proclaims they must—by narrowing the price/cost gap. Once the gap is somewhat narrowed and a new, substantially lower-than-the-start plateau is reached, the winning strategy for the long haul becomes differentiation—via service, quality, and variety. … But the pioneer no-frills provider almost inevitably sows the seeds of its own destruction. Its position is ultimately fragile and vulnerable to the clever differentiator, which will likely win both the customers and the profits over the medium to long term. Tom Peters

Taken from Thriving on Chaos, which was published back in 1987, and rings just as true today!