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Takedown

Cannibalize Yourself

I recently read a story about how Volkswagen is considering NOT bringing the upcoming Scirocco (an updated version of their 80′s hatchback sports coupe) to the US market because it might take market share from their currently offered GTI hatchback.  While this may be an excuse masking other reasons for such a decision, if it is the real deal, it seems patently absurd to me.  Like any company, Volkswagen should be worried about how its competitors are planning to take market share away from them, not whether or not they will do it to themselves.  If you create better products for a market you serve you should use them to expand or, at least, solidify your position in the segment, not hold them back until your competition introduces product that threatens your position.  This is even true if you already are the leader in the segment.

I believe that if the new product is 100% of an overlap with an existing product and does nothing to expand the product’s market (this includes the case where there’s minimal expansion), then the original product should be replaced by the new one.  If there is overlap, with each product covering segments not addressed by the other, then keep both products and direct customers to your entire product offering regardless of their specific preferences – because you cover them with the breadth of your products.  Never wait.

Your market is full of competition, even if you don’t see it, it’s there, lurking in the shadows waiting to attack.  To make things worse, with almost no barriers to entry in any market these days (including capital equipment), a new competitor can spring up overnight.  Only by being aggressive – rolling out constant improvements and new, replacement products – can you retain or grow your market share and keep competitors at bay.  Always play offense.

Someone is always working to knock your products and services off their market perch.  To maximize your success, that should always be you.  Your biggest competitor should be . . . you.

  • Dave

    It seems like the question of whether to retain an older product, even when the new one is not 100% overlapping, is not as simple as just retaining all the customers. There are issues of product confusion and message dilution as well. This doesn’t really affect your main point, that they shouldn’t delay bringing on the NEW product in any case.

  • Dave

    It seems like the question of whether to retain an older product, even when the new one is not 100% overlapping, is not as simple as just retaining all the customers. There are issues of product confusion and message dilution as well. This doesn’t really affect your main point, that they shouldn’t delay bringing on the NEW product in any case.

  • http://www.2-speed.com/ Will

    Agreed. Simplified for sure, but as you say, the point still remains. Fix the confusion and keep moving forward.

  • http://www.2-speed.com Will

    Agreed. Simplified for sure, but as you say, the point still remains. Fix the confusion and keep moving forward.

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