What is in business, what is cannibalization?

Cannibization in business concerns the practice of competition with the already established business model by creating a reduction in sales volume or reducing the total market share. cannibalization , which is happening, usually focuses on attracting clients or customers. One practice cannibalizes the market, which is also focused on further practice. Also known as market cannibization, it can occur in a single business that provides two or more competing products or services, or may occur among more competitive sectors. It can also take place among numerous chains of the same business or between the accompanying product lines that have similar offers.

often the phenomenon of cannibalization occurs when the company's marketing strategy is based solely or partly on the assumption that the market is able to support more trades or more products.Race of retail store has a specific trade that is doing very well in a particular area. The company could decide to open the second place in the same area, assuming that the proven sales in the first store would support another store, even if both places make a little less trade than the existing single place. Just as Kanibal is known to consume another meat, business cannibalization suggests that the new business could feed the final success of the first placement. If the cannibalization manifested itself, the first trade would begin to see a reduction in the market share, as the second trade began to remove some of the sales income, thus reducing the overall data on the selling of the primary placement. This, of course, assumes the final customer base that would not increase on the basis of increased places.

Although business cannibalization may seem to be negative, it may be a positive thing. Sometimes it includes a cured strategy and also forces society to think outside the boxto evolve with changing market needs and consumer needs. For example, in the world of electronic trading, some companies deliberately cannibalize their retail sales through lower prices of their online products. Although their sales in stores could be reduced, the company can see overall positive profits. While the retailer saves money for the operating costs of the placement of bricks and mortar, the consumer automatically benefits from the cannibalization of the retailer through lower goods costs.