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Threat of substitutes

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Threat of Substitutes Force: Likelyhood of changing to substituteproduct Ifswitchingcost is low -> seriousthreat Examples: Industry – Soft Drinks Buyerpropensity to substitute: BrandLoyalty <- decreases the threat Relativepriceperformance: Pricecompetition: Similarproductbutcheaper = threat Lowerqualitybutsignificantlycheaper = threat Slightlybetter and a littlemoreexpensive = threat Buyerswitchingcosts: Biggercosts, smallthreat. Buyerslike to useonlyonesupplier. ,[object Object]
Fixedterm leasing contracts (sodamachines/brandfridges), maintenancecontracts, re-fill and deliveryterms and costsreduce the threat of switching. ,[object Object]

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