CIMA E2 Syllabus A. Business models and value creation - Threat of substitutes - Notes ^{3 / 10}

A substitute product is a product from a competitor which can be used in place of a company's product and satisfies the customer needs.

For example, if a company sells motor bikes in a particular country and the government of that country is now planning a major overhaul of the metro system. The metro system is a substitute which would satisfy the same customer needs, which are to travel from one place to another.