Corporate Cannibalism

Categories: Company Management

Back in 2007, Apple unveiled the iPhone. It was a remarkable moment in the history of technology. Not only did it redefine what a cell phone could do, but it dramatically altered human behavior forever.

The iPhone went above and beyond merely replacing traditional cell phones. It completely eliminated the need for MP3 players and the company’s successful product: the iPod. Apple was engaging in a process known as corporate cannibalism.

This process is the deliberate introduction of a new product that infringes on the company’s own market share. This is different than market cannibalism, as the company engaging in this process is eating into its own sales and market share.

The company not only cuts the price of its previous product line, but it also establishes a new, better product line. By devouring its own market share, the company hopes that it will be able to gain even greater share of the total product category.

Apple introduced a new product into a market where its existing products had already found success. This has been an evolving business strategy of Apple. It has also cannibalized its own MacBook Pro computers with the MacBook Air, and cut into the sales of its iPad with the introduction of the iPad Mini.

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