cannibalization

Definition:
In marketing terms, any new activity undertaken by an organization which adversely affects existing business is said to cannibalize it. The launch of a new product into a market in which the organization already has an existing product will, almost inevitably, have some adverse affect on the existing brand. Such effect must be taken into account in forecasting the profitability of such new activity. An international aspect of cannibalization may be seen in the effect on national subsidiaries of a multinational company where there are 'cross-exports'; for example if a British car-maker sells his car at greater profit in Britain than in Belgium, he loses business through cannibalization every time a British buyer goes to Belgium to buy one of his cars: overall planned company profits decline.

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