This is called 'Barriers To Entry' Strategy. Likely the new joiner is adopting 'Loss Leader Strategy'. Who will be the winner?
DEFINITION of 'Barriers To Entry'
The existence of high start-up costs or other obstacles that prevent new competitors from easily entering an industry or area of business. Barriers to entry benefit existing companies already operating in an industry because they protect an established company's revenues and profits from being whittled away by new competitors.
DEFINITION of 'Loss Leader Strategy'
A business strategy in which a business offers a product or service at a price that is not profitable for the sake of offering another product/service at a greater profit or to attract new customers. This is a common practice when a business first enters a market; a loss leader introduces new customers to a service or product in the hope of building a customer base and securing future recurring revenue.