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Cannibalization Risk
The potential risk that a new product or acquisition will eat into the sales of an existing product, often analyzed during the due diligence process.
Implications
The potential threat that introducing a new product will reduce sales of the company�s existing products, often a key consideration in product development and marketing strategy.
Example
Example: A car manufacturer assesses cannibalization risk before launching a new model that could take sales away from an existing model in its lineup.
Related Terms
Different from competitive risk, which comes from external competitors, cannibalization risk is an internal concern related to the company�s own products.
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