Problem definition: Dominant retailers often pressure manufacturers to commit to future wholesale price reductions, yet the implications of such price-cut commitments---particularly when retailers can also hold strategic inventory---are not fully understood. The decision is further complicated when multiple retailers compete for supply, as both commitments and inventory strategies influence upstream cost-reduction incentives, downstream pricing, and overall supply chain performance. Methodology/results: We develop a two-period supply chain model incorporating a manufacturer's endogenous cost-reduction investment and retailers' incentives to hold strategic inventory as a bargaining tool. The analysis shows that price-cut commitments do not necessarily harm manufacturers; they can increase profits and stimulate cost-reduction investment. However, in large markets, such commitments may backfire on retailers, lowering their profits even without competition. We identify a Pareto "win--win" zone---particularly when cost-reduction investment is efficient---where both manufacturer and retailer(s) gain, and overall supply chain profit and social welfare improve. Retailer competition, however, reduces the likelihood of commitments, creating a prisoner's dilemma in which mutual gains are lost due to individual incentives. Under moderate market size, asymmetric equilibria may emerge, with one retailer favoring a commitment and the other relying on strategic inventory. Moreover, we find a "two horns are worse than one horn" effect: under aggressive price-cut pressure and moderate market size, a manufacturer may earn more selling to a single retailer than to two competing ones. Managerial implications: For practitioners, the findings provide guidance on when to request price-cut commitments versus relying on strategic inventory. Manufacturers should recognize when competition among dominant retailers erodes their profits, and both managers and policymakers can use these insights to design contractual arrangements that improve supply chain profit and social welfare.