CANNIBALIZATION Meaning and
Definition
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Cannibalization refers to the process in which a new product, service, or innovation negatively affects the sales or market share of an existing offering within the same company or industry. It occurs when the introduction or addition of a new product or service leads to the decline in demand or sales of an already established or similar product or service by the same company. This phenomenon is often observed in industries that experience rapid technological advancements, changing consumer preferences, or intense competition.
Cannibalization can be intentional, as a strategic move by companies to replace older, less profitable offerings with newer and more lucrative ones. This strategic cannibalization aims to capture new market segments, keep up with trends, or increase overall profitability. Alternatively, cannibalization can also occur unintentionally, as a byproduct of innovation or expansion efforts. In these cases, the new offering inadvertently diverts customers and sales from existing products or services.
The effect of cannibalization can vary depending on numerous factors, including the extent of similarity between the products, the timing of introduction, the target market, and the overall marketing and pricing strategies implemented. Companies have to carefully manage and anticipate potential cannibalization risks to minimize the negative impact on their business, while maximizing the benefits of innovation, growth, and market expansion.
Common Misspellings for CANNIBALIZATION
Etymology of CANNIBALIZATION
The word "cannibalization" is derived from the noun "cannibal", which traces its roots back to the Spanish word "caníbal" or "caríbal". The Spanish term "caníbal" was derived from the Taino word "karibna", which referred to the indigenous people encountered by Christopher Columbus in the Caribbean. The Taino word eventually found its way into Spanish as "caríbal", which referred specifically to these indigenous people who engaged in cannibalism.
The word "cannibal" gradually entered the English language in the 16th century, used to describe individuals or tribes that practiced the consumption of human flesh. Over time, the term expanded to include metaphoric uses, such as describing someone who preys on or exploits others in a predatory manner.
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