At the moment, there is no other technology available that could. An example of this is owning a DSLR camera instead of an iPhone 12, but iPhone 12 does more than take clear pictures, giving it the edge over a DSLR camera. The threat of substitutes for Apple products is particularly low due to the limited capabilities of said substitutes. Substitute product is more expensive than industry product.
The threat of substitutes is low when: Consumer switching costs are high. Substitute performance is equal or superior to industry product performance.
Substitute product quality is equal or superior to industry product quality. Substitute product is cheaper than industry product. They include the threat of substitutes, threat of new entry, bargaining power of customers and suppliers as well as intensity of rivalry in the industry (Porter, 1980: 5-11). These factors can be briefly analyzed using the Porter Five forces analysis. However, there are certain factors which affect the entry to the cosmetic industry by firms. Mitigating the Substitution Threat Another example of dealing with the threat of substitutes hits close to home for me. The threat of substitutes was real for us and it came from an unexpected source. Thus, the strength of competitive pressures from substitute products depends on three factors: Whether (1) substitute products are attractively priced and available (2) buyers view the substitutes as comparable when analyzing price, quality, performance and other attributes and (3) buyers can easily switch to substitutes.