100 Great Business Ideas: From Leading Companies Around the World (100 Great Ideas)

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44 • 100 GREAT BUSINESS IDEAS


Instead of allowing other companies to eat into your market,
consider bringing in new products to compete with your existing
ones. This may sound like suicide, but handled expertly it allows
you to remain on the cutting edge and ahead of the competition.


The idea


When there is a limited market for a particular product or service,
any new competitors may consume the market. A possible response
to counter this is cannibalization—bringing in new products
to compete with your existing offering. This is a tactic used by a
surprisingly large number of businesses, from the café franchise
Starbucks to the technology manufacturer Intel.


Starbucks’ well-known tendency to open branches within minutes
of each other represents a fi erce desire to keep competition at bay.
Even though these branches will be competing with each other for
a limited number of clients, Starbucks has recognized that this is
preferable to competing with other potential market leaders, such
as Costa Coffee and Caffè Nero.


Manufacturers of computer hardware and software, such as
Apple, Intel, and Microsoft, are other well-known examples of
cannibalization. By regularly bringing out upgraded versions of
their products (ie faster computers or more virus-resistant software)
they not only remain at the cutting edge of the industry; they also
persuade customers to purchase new products, and allow less
room for competitors to encroach into their market. This works well
in fi ckle markets with limited loyalty (for example, Starbucks may


19 Cannibalizing

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