The second force considers the threat of substitutes as competitive goods that may replace or complement an organization's offerings. Substitutes, are differentiated from the core product or services that the main competitors within the industry offer. However, they are still categorised as a competitive force as existing customers may switch to them and create an impact on the industry's market share and profitability. Where substitutes offer considerable performance advantages for their price value (price/performance ratio) and are developed by powerful and viable industries, they should be considered a serious competitive factor.
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