Cannibalization

Cannibalization is the act of consuming individuals of the same species. In everyday usage, the term also describes a market phenomenon in which the introduction of a new product or service by a company reduces the sales or market share of one of its existing offerings.

In biology, cannibalism refers to individuals eating conspecifics. It occurs across many taxa, including insects, fish, amphibians, reptiles, birds, and mammals. Cannibalism can arise from nutritional stress, competition, mating strategies, or social structure. It can influence population dynamics, resource competition, and social behavior, and may carry costs such as injury or disease transmission for both consumer and consumed.

In business, cannibalization refers to the market-share transfer between products within the same company. It occurs when a new product, feature, or pricing strategy attracts customers away from an existing offering. The cannibalization rate estimates the portion of lost sales from the old product that is captured by the new product, and it is used in portfolio planning, product launches, and revenue forecasting.

Managing cannibalization involves product differentiation, segment targeting, timing the rollout, or expanding into different geographies. While cannibalization can undermine short-term profitability, it may be strategic if it enables overall growth, better allocation of capacity, or access to new markets. Companies weigh the potential sales gains against the impact on existing products when deciding on product-line changes.