Food & Healthcare
In the long run, healthy food can be a substitute for healthcare. For example, if a nation began to consume less sugar demand for diabetes treatments may drop.Toothpaste & Dentists
In theory, some leap forward in the effectiveness of toothpaste could cause reduced demand for dentists.Radio & Television
An improvement in technology that causes a growing market to suddenly contract such as the impact of the television on radio stations in the 1950s whereby TV quickly became the dominant form of home entertainment.Bicycles & Cars
A culture can shift towards living close to the things people need and travel with bicycles as opposed to cars.Restaurants & Supermarkets
If people eat out more, supermarket sales go down.Nightlife & Games
As games become more entertaining people may socialize in virtual worlds as opposed to going out at night.Video Rentals & Streaming Media
Video rental shops were largely replaced by internet services in the early 2000s. The first wave of this were internet-based mail order rentals with no late fees. Later, these services switched to streaming media.Long Distance & VOIP
Long distance telephone services were threatened by internet-based substitutes as early as 1995 including email, messaging and voice over IP.Education & Travel
If college is perceived as overpriced and out-of-touch with real life, people may spend their money on travel experiences.Flights & Trains
In theory, high speed trains could compete with air travel on many domestic routes when the full round trip time including transit to an airport is considered.Bottled Water & Tap Water
If people have confidence in the quality of their local water supply they may stop buying as much bottled water.Software & Outsourcing
Firms can purchase software to automate their processes or they can outsource the entire process.Hotels & Short-term Rentals
Hotels that face competition from short term rentals of apartments and homes.Robots & Labor
In the labor market, robots and automation are often perceived as a substitute for the work of employees. Historically, automation has caused a shift in demand for skill sets but not necessarily a drop in the overall employment rate.Locations & Transport
The only hotel on a prime beach may face declining demand if competing hotels sponsor a convenient and free shuttle service to the beach.Summary
The threat of substitutes is the potential for consumers to shift to new goods and services to meet existing needs.
| Overview: Threat Of Substitutes | ||
Type | ||
Definition | The potential that customers will replace your product or service with a substitute good. | |
Related Concepts | ||
