In business finance, what is a common outcome of cannibalization?

Cannibalization occurs when a new product takes sales away from an existing product within the same company. This often leads to a decrease in sales of the original product, as consumers may choose the new offering instead. In many situations, businesses introduce new products to capture market interest or to innovate, but if these new products are too similar to existing ones, they can inadvertently impact the demand for the older products.

While a company may introduce a new product to boost overall sales and market presence, the immediate effect can be a drop in the sales of existing products. This phenomenon highlights the importance of careful product differentiation and strategic planning when launching new items.

Overall market share may improve in certain circumstances where the company captures new customers, but the question focuses more specifically on the direct impact of allowing a new product to cannibalize sales from an existing product line, making the decrease in sales of existing products the most fitting outcome associated with the concept of cannibalization in business finance.