Cannibalization Rate is the % of new product sales that represents a loss of sa

Breakeven rate of cannibalization = cannibalized sales volume of old offering /

at which co. neither makes profit n

Profitnewoffering >= LostProfitoldoffering

Volumenewoffering x Marginnewoffering >= LostVolumeoldoffering x Marginoldoffering

LostVolumeoldoffering/Volumenewoffering = Marginnewoffering/Marginoldoffering

Breakeven rate of cannibalization = Marginnewoffering/Marginoldoffering

Old New
Price 100 60
Cost 60 50
Margin 40 10
Vol 10 15

Breakeven rate of cannibalization = ? 0.25

Volume of new from cannnibalization= 3.75
Profit 400 400
t represents a loss of sales of existing products

volume of old offering / sales volume of new offering

o. neither makes profit nor loss

ng
x Marginoldoffering

arginoldoffering

ffering
/Marginoldoffering