Threat of Substitutes
The risk that customers will meet the same need with an alternative product that is not a direct competitor.
The threat is strong when customers have access to a variety of alternatives that are less expensive, easier to access, or higher quality. Substitutes serve the same need through a different product, which is what separates them from rivals.
Often confused with
- Competitive Rivalry
- A substitute meets the same need with a different product; a rival meets the same need with the same product.
Taught in
See also
4.4.A.5 · 4.4.B.4