With reference to Porters analysis, determine the factors that incline buyers to substitute products? 

Expert Answers
farouk23 eNotes educator| Certified Educator

Porter’s analysis refers to Porters five principles for strategic business development. The analysis tools used by the five principles help determine an organizations overall market position and assist in the planning of critical business decisions. Porter’s five principles are: 

  1. Supplier power
  2. Buyer Power
  3. Competitive Rivalry
  4. Threat of Substitution
  5. Threat of new entry

Product substitution occurs when customers are able to either replicate a particular product or service themselves or obtain it from another source. Consumer product substitution occurs especially when it is feasible and simple to do on the part of the customer. Some factors that may lead to a customer substituting a product are:

  1. Poor quality
  2. lack of differentiation
  3. Pricing