Thursday, January 24, 2013

Eating your own beats getting eaten.


I had a bit of a brain jolt this morning when I saw Apple CEO Tim Cook's comments on cannibalisation as part of the Q113 earnings call today. 

“I see cannibalisation as a huge opportunity for us,” Cook said. “Our core philosophy is to never fear cannibalisation. If we don’t do it, someone else will. We know that iPhone has cannibalised some of our iPod business. That doesn’t worry us."

Why waste resource protecting territory that your competitor has under full attack and customers don't want? Keep going and take new ground with more advanced products as the technology and user preference develops.

It's so damn obvious I can't believe the years I've sat in meetings nodding along to 'evils of cannibalisation' pep talks. 

My first job was in FMCG sales and I remember we had to sell a new Weight Watchers branded product into the supermarkets. It was a fantastic product. Dripping chocolaty goodness with sexy packaging and hardly any calories. The issue was, we already had a plain old 'Lite' product that was doing quite well and we weren't allowed to cannibalise it.  Our instruction was to create new shelf space and not take any facings off the existing diet product. 

When presented with the Weight Watchers sample, buyers would always point at the 'Lite' product on the shelf and say: "so we don't need that one?"

All the 'anti-cannibalisation' tactic did was create confusion and slow down the adoption of the new shiny product. In the meantime. competitors could refine their their own 'Lite' offers by copying ours and gain more market share by picking off our older, weaker incumbent. 

Eating your own might sound primitive but it does keep you at the top of the food chain. Something Apple is very good at. 


Posted via email from cjlambert's posterous

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