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Substitutes
A good or service that can take the place and serve some or all of the function of another. Classic examples of substitute goods include margarine and butter, tea and coffee. Substitutes rarely provide functionality and features identical to the other product. A substitute is a replacement. In Porter's model, substitute products refer to products in other industries that meet the same/similar need. To an economist, a threat of substitutes exists when a product's demand is affected by the price change of a substitute product. |
