Question

Chris and his family have developed a successful business selling a liquid spray fertilizer to farmers. The fertilizer consists of rich, organic, composted material. Recently, Organic Seed, a national seed company, has been marketing a powdered chemical fertilizer to its customers; Organic’s fertilizer is less expensive than Chris’ product. Organic’s efforts are an example of the ___ in Porter’s model for industry analysis.

Answer 1

Answer:

Organic’s efforts are an example of the threats of substitute products and services

Explanation:

Answer 2

Answer:

Organic’s efforts are an example of the threats of substitute products and services in Porter’s model for industry analysis.

Explanation:

The application of Porter's model in the reality of a company can be the great differential capable of helping the leadership in defining its goals and even its brand positioning. This model consists of considering 5 “forces” that, according to Porter, can determine the position of any company in its respective market. These forces are: rivalry between competitors; bargaining power of suppliers; bargaining power of customers; threat from new competitors; threat of new products or services.

In relation to the case raised in the question above, Organic's efforts are an example of the strength of "substitute product and service threats" in Porter's model for industry analysis. Not always the worst threat comes from a known competitor or new market players, but from new products or services that make your solution outdated. So it is worth considering this threat, which represents Porter's fifth and last force.