cannibalization


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Corporate Cannibalism

An act or strategy in which a company introduces a new product into a market where the same company's products are already well established. A company engaging in corporate cannibalism is effectively competing against itself. There are two main reasons companies do this. First, the company wants to increase its market share and is taking a gamble that introducing the new product will harm other competitors more than the company itself. Secondly, the company may believe that the new product will sell better than the first, or will sell to a different sort of buyer. For example, a company may manufacture cars, and later begin manufacturing trucks. While both products appeal to the same general market (drivers) one may fit an individual's needs better than the other. However, corporate cannibalism often has negative effects: the car manufactures customer base may begin buying trucks instead of cars, resulting in good truck sales, but not increasing the company's market share. There may even be a decrease. It is also called market cannibalization.

cannibalization

a situation where a new brand gains sales at the expense of another of the company's brands.
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Even most of those who have automated the time-consuming process are not realizing the return they had hoped for, because they are missing one crucial element of the story: cannibalization. Without an accurate understanding of how one item cannibalizes the rest of its market segment, one cannot determine whether an item is adding variety or duplication to the mix.
However, stripping away the impact of the aforementioned cannibalization same-store volume would have grown 0.7%.
So even though there's some cannibalization, it's positive cannibalization for the retailer."
The reason: cannibalization of same-store sales from established stores by new outlets.
One is cannibalization, which is occurring largely because clubs have failed to increase sales of older units before opening others in the same market.
"In the past cannibalization was self-inflicted," Menzer told analysts at the annual meeting.
Said Anderson, "We don't view the Internet as a cannibalization, we see it as a great way to reach new markets.
Although Schering-Plough believes that there may be some cannibalization of Gyne-Lotrimin sales from FemCare, it also feels that there's plenty of room for both in a category for which it projects 37% growth this year--to $315 million in retail sales, up from $230 million in 1991.
"The possibility of cannibalization is not enough of a concern to keep us from going into the business.
On the negative side, Humira continues to lose market share to newer biologics like anti-IL-17s and approved anti-IL-23s at a "rapid pace" that may be accelerated by cannibalization at the hands of risankizumab, adds the analyst.
Speaking at the company's annual analysts conference, Wal-Mart Stores division president and chief executive officer Mike Duke explained that cannibalization of sales has turned out not to be a real worry as Wal-Mart opens Supercenters within just a few miles of one another.
He views the Model Y unveiling as "a double-edged event," since it could add further pressure to near-term results if the hype around the launch is strong and it drives concerns of cannibalization of the Model 3, S, and X, Jonas added.