Q512
Situation in which new business reduces an existing business of firm is classified as
A.
non-cannibalization effect
B.
cannibalization effect
AnswerC.
external effect
D.
internal effect
Answer: Option B
Solution
Answer: Option B
Solution:
Situation in which new business reduces an existing business of firm is classified as cannibalization effect. Market cannibalization is a sales loss caused by a company's introduction of a new product that displaces one of its own older products rather than increasing the company's overall market share.