Cannibalization is a significant issue that many companies face, where one product or initiative negatively impacts another product or initiative, ultimately hurting overall business results. In this post, we’ll examine how to identify, fix, and prevent cannibalization, drawing insights from a helpful Whiteboard Friday video by Jon Earnshaw, Chief Product Evangelist at Pi Datametrics.
Earnshaw breaks down cannibalization into three main types: internal, international, and subdomain. Internal cannibalization refers to products within the same company competing for the same customers. International cannibalization occurs when a company expands into a new country, but ends up competing with its existing business in other countries. Subdomain cannibalization happens when a new offering eats into the customer base of another offering, even though they are under the same company umbrella.
By understanding these three forms of cannibalization, we can better detect when it is happening and take steps to mitigate or prevent it entirely. In his video, Earnshaw provides a framework for identifying cannibalization based on analyzing specific metrics and user behavior. He offers suggestions for addressing cannibalization once identified, through tactics like discontinuing products or improving targeting and messaging. Applying these best practices can help companies optimize their product portfolios to drive growth rather than internal competition.