Let's Discuss the Idea and Practice of Cannibalization for your Market
Rather than giving other companies the chance to consume your market gradually, you should think of introducing new products to compete with existing products. This may sound like an action which could lead to the literal or figurative death of your organization as its consequence, but if this is done in an expert manner with great skills, it allows you to remain on the forefront, or position of greatest advancement in the market and ahead of the competition.
When the market for a certain product or service becomes limited, such market may be consumed by any new competitor. A likely measure that can be used to counter this is cannibalization, which is the introduction of new products to compete with existing products. This particular tactic has been used by a good number of businesses which include but not limited to cafe franchise Starbucks and technology manufacturer intel. The familiar likelihood of starbucks to open a new branch in a few minutes after another is a good representation of an extreme desire to remain competitive. Despite the fact that these branches will be in a position in which it is possible to win or triumph with each other for a limited number of customers, it has been recognized by Starbucks that this is better than going into a competition with other potential market leaders such as Caffe Nero and Costa Coffee.
There are other good examples of cannibalization that are widely known and they include manufacturers of computer software and hardware, such as Intel, Apple, and Microsoft. Not only will they stay at the forefront of the industry by regularly delivering the latest versions of the their products (for example, computers that are faster or software that are more resistant to virus); they also are able to successfully convince their clients to make a purchase for new and latest products, and allow less room for competitors to intrude unrightfully into their market. This works well in markets where it is quick to change one’s opinion or allegiance (for example, Starbucks might have the feeling that people who want coffee are may be ready to get it anywhere). This also works when people try to keep up to date for various number of reasons (for instance, with the new and latest technological developments). Applying the idea of cannibalization into your business demands that you put some key points into practice. These points include the following:
There is need for market conditions to be judged so as to make a precise decision about when a certain product should be cannibalized. At most times, it require a lot of time and money to develop a product. Due to this, if your existing product is still bringing in a huge profit and it is not compromised by your competitors, you need to postpone the introduction of a new offering to a time when it is most needed and worthy to be desired.
Ensure to carry out cannibalization when it is expected that a competitor will introduce a new product that have the potential of becoming popular.
When sales cease to develop or advance, the cannibalization of your existing products with a representation of the forefront, or position of greatest advancement offerings can encourage overall sales in a radical manner.
Do not be afraid to compete with yourself. In spite of the fact that it may seem discouraging initially to risk ending abruptly the market for your existing products, you should see it as a better way to deal with the dog-eat-dog, active modern business that possess the ability of changing from time to time. This will also trigger and activate the innovative side of you and help you overcome a feeling of contented self-satisfaction, especially when unaware of upcoming trouble.
Kindly let me know your view in the comment box below.
Great business ideas from leading companies around the world by Jeremi Kourdi.
This is my entry to the 12th day of #thebeast. Big shout out to the sponsors. Also published on my steemit blog, but was up on whaleshares first.