Cannibalize your markets
Launch new goods or services that gain market share at the expense of existing offerings. By recognizing that the old channels for doing business will disappear on their own soon enough, cannibalizing is a powerful way to get into the new channels early enough to be a competitive player.
Leverage information assets to design products and services appropriate for new channels, and use existing brand to promote them.
Established companies can become cannibals by leading with brand—an information asset that gives them competitive advantage in cyberspace—but only if it is used in time:
Ernst & Young
(p. 89) launched "Ernie," a Web-based question and answer service offered to clients for $6000 a year. Ernie is not a replacement for the on-site services of an E&Y consulting team, but a clever way for the firm to leverage its knowledge base of client and industry knowledge. It is also a cheap point of entry for new clients who, as they become more successful, can be groomed for the consulting firm’s higher-priced services.
New competitors have to build awareness from scratch, but having no market to cannibalize, can leverage freedom of movement and ingenuity to great success:
C/Net (p. 92), a technology-oriented media company founded in 1992, develops content centrally, then distributes it over a variety of media, including the Web, cable TV, daily E-mail dispatches, and Internet radio. Almost half a million subscribers receive the daily bulletins, and the site is one of the most heavily visited on the Web, contacted by up to 3 million users a day.
Saturn (p. 88), Charles Schwab (p. 90), Hambrecht & Quist (p. 90), Wall Street Journal Interactive (p. 92), Marshall Industries (p. 93)