Learn in the textbookCompetitive Economics and Market Concepts
DefinitionCannibalization (カニバリゼーション) is when a company's new product or store takes customers and sales away from its own existing products or stores.
ExplanationIn Japanese it is rendered as "eating one's own kind," meaning total market sales do not grow and revenue merely shifts within the company. It tends to happen when products with similar features or price ranges are aimed at the same customers. When planning a new product, you need to estimate how much revenue will move over from existing products.
AnalogyIt is like opening a second branch of the same chain on the same shopping street, only to find that the first branch's regulars simply moved to the new one.
Memory hookThe word comes from cannibal, one who eats its own kind. The sense of members of the same group devouring each other survives in the name.