Question

Tom and his family have developed a successful business selling fertilizer to other farmers in his area, consisting of rich, organic compost material. Recently abc seed, a national seed company, has been marketing a chemical fertilizer to his customers that is less expensive than tom's product. Abc's efforts are an example of ___ in porter's model for industry analysis.

Answer 1

Abc's efforts are an example of "threats of substitute products or services" in porter's model for industry analysis.

Porter’s threat of substitutes definition is the accessibility of an item that the purchaser can buy rather than the industry’s item. A substitute item is an item from another industry that offers comparative advantages to the shopper as the item created by the organizations inside the business. As indicated by Porter's 5 forces, threat of substitutes shapes the focused structure of an industry.