Market cannibalism

This occurrence can have either a positive or negative impact on the company's bottom line, can be accidental or deliberate, in which case it is commonly called cannibalisation strategy.

This type of market and corporate cannibalism is one factor that makes it hard today in Europe for example to find any computer not produced in China.

[1] Suppose that pet-food manufacturers A, B and C offer one line of tinned cat food each, and that the customers cannot really distinguish between them, thereby giving them 33.33% share of the market, each.

Every year, computer based companies market machines that are more and more powerful, and cheaper to make thanks to technological advancements.

Computer based companies attempt to promote their newer models every year because of this, as it allows them to further increase their profit margin.

[6] A hypothesis is that by better controlling innovation as a reason for market and corporate cannibalism, higher wages and better social standards can be achieved for the whole market and corporation than those that can be achieved without innovation control.

Research and development plays a crucial role in the increasing of market share, a company's ultimate goal.

Being costly in terms of money and time, a company will seek to invest in what they believe will gain them the most market share.

[7] Their downfall was due to their investments being ill-placed, as they refused to seek innovation, afraid that it would cannibalise their already established products.

This example shows the importance of companies cannibalising the market share of their own products, in order to keep a globally higher market share and prevent competition from cannibalising them, which ultimately leads to the first becoming obsolete.

On the first month of launch, the chocolate chip cookie makes 50 sales a day.