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Learn what corporate cannibalism is in 2 minutes

Welcome to Professor Savings.com

We teach finance basics.

Hi, I’m you’re host today Rayfil Wong

todays topic..

What is corporate cannibalism?

This  simply when a company releases a new product that decreases the sales of another product.

Let’s take Jane here.

She is the CEO of Jane’s Pizza Inc.

Famous for her meatball pizza but one night she tries out her new sweet and sour chicken pizza and it becomes  an instant hit and sales for chicken pizza explodes while her meatball pizza sales slides down.

So basically the meatball pizza is competing against sweet and sour chicken pizza.

Companies do this to try to increase their market share.

Basically, taking customers from a from a competitor.

In this case, Jane’s chicken pizza may take customers away from Fred’s chicken pizza.

  Jane can win new customers by taking away Fred’s customers.

Corporate cannibalism may also occur as a strategy to increase range of products to accomodate taste in certain areas

for instance, Jane’s vegetarian pizza  in a San Francisco due to a large number of vegetarians.

Pretty simple.

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