What effect would introducing a new competitor have on an existing product's sales?

Introducing a new competitor into the market typically creates additional pressure on existing products as consumers now have more options available to them. This heightened competition can lead to various outcomes for the established products, among which the most common is a decline in sales.

When a new competitor enters the market, they may offer similar products, possibly at lower prices or with better features, thus attracting customers away from established brands. As customers shift their preferences towards the newcomer, the existing product may experience a decrease in sales numbers.

Additionally, if the competitor invests in effective marketing strategies, it can further diminish the market share of the established product. The presence of a competitor can also lead to pricing wars, where existing companies feel compelled to lower their prices in response to the new entrant, which can shrink profit margins and affect overall sales negatively.

Therefore, the introduction of a new competitor generally leads to a scenario where sales for existing products may decline as they fight to retain their customer base amidst increased competition.