Cannibalization

I happened to be sitting in a marketing training session last fall along with marketing people from a variety of consumer groups. Several people talked about "soft launching" some new offerings.

What was interesting was the number of people who defended this approach as a means to avoid cannibalizing their existing customer base. I can appreciate their concern to avoid erosion of their customer base but if they are not pushing new, forward-looking services then their competitors will be more than happy to do so.

Yes, the risk of short-term losses exists but isn't taking revenue from one pocket and putting it into another within the same company better than losing revenue to a competitor altogether? If the corporate structure endorses competition among its divisions then this problem could be exacerbated and the risk of being blindsided by competitors will become all the more likely.

This is exactly the kind of "either-or" situation Roger Martin, Dean of the Joseph L. Rotman School of Management, discusses in his Harvard Business Review article, How Successful Leaders Think. In the article, Martin suggests that leaders who apply integrative thinking devise an entirely new solution or third option rather than choosing between two competing ideas when trying to resolve question of strategy.