Cannibalization Predictor
Estimate the impact of launching a new product on your existing portfolio. Calculate net revenue gain after accounting for sales stolen from your own flagship.
Incumbent (Product A)
Challenger (Product B)
200 units of New Lite Version come from Flagship.
Revenue Impact
Launch Verdict
Growth Opportunity
The Trade-Off
You lose $20,000 from Flagship to gain $30,000 from New Lite Version.
Net Result
Total Revenue changes by $10,000.
Downgrade Risk
200 customers are trading down. Ensure the new product has lower costs to maintain profit margin.
Execution Steps
Enter details for your Current Product (A) and the New Product (B) you plan to launch.
Estimate the 'Cannibalization Rate': What % of buyers for the new product are switching from your old one?
The tool calculates 'Units Stolen' vs 'Net New Growth'.
Analyze the Net Revenue Impact to ensure the launch doesn't destroy value.
Pro Strategy
- If Net Impact is negative, you are 'trading dollars for dimes'. Differentiate the products more to lower the cannibalization rate.
- Cannibalization isn't always bad. It's better to cannibalize yourself than let a competitor do it.
- Use 'Fences' (feature limits) to prevent high-value customers from downgrading to the new cheap option.
Core Concepts
Cannibalization Rate
The percentage of sales for a new product that are taken from an existing product in the same line.
Market Expansion
Sales of the new product that come from new customers (not switching from existing products). This is 'Net New' growth.
Trading Down
The danger of launching a cheaper 'Lite' version. If too many 'Pro' users switch to 'Lite', total revenue drops even if unit volume rises.
What is Cannibalization Predictor?
This model simulates portfolio interaction. It subtracts the 'switched' volume from the incumbent product's revenue and adds the full volume of the new product. The delta represents the true incremental value of the launch.
Best For
- • Launching a discount brand or 'Lite' tier.
- • Introducing a successor product (iPhone 15 vs 14).
- • Expanding into adjacent categories.
Limitations
- • Assumes linear substitution.
- • Does not account for competitor reaction.
- • Ignores operational costs of managing two SKUs.
Alternative Methods
Cross-Elasticity
Measuring the exact sensitivity between two products.
Conjoint Analysis
Determining preference share in a simulated market.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
SaaS Lite Tier
Launched a $20 version of a $50 product to capture SMBs.
Simulated 50% cannibalization.
Soda Brand
Launching 'Zero Sugar' variant.
High cannibalization of core soda, but attracted lapsed users.