In this third part of the Porter’s Five-Forces series, I shall be combining two of the five forces into one post as the threat from substitutes is very short and sweet, while customer power has more to elaborate on. This continues the series on Porter’s Five-Forces which was left behind some time back as I concentrated on doing corporate analyses. Now with those behind me and the two recent AGMs of MTQ and Boustead concluded, it’s time to dive back into some academic discussions.
Threat from Substitutes
Substitutes are products or services which perform essentially the same function, and this can arise to become a serious problem for companies should their product be substituted for either a cheaper alternative, or a more efficient one. The example given in the book was that of the beverage packaging industry, whereby consumers do not differentiate between plastic, aluminium or glass. Imagine your Yeo’s ......