When is the threat of substitute products considered high?

The scenario in which the threat of substitute products is considered high occurs when there are many similar products in the market. This abundance of alternatives means that customers have more options to choose from, which increases the likelihood they will switch to a different product if the one they are currently using no longer meets their needs or if they find a better value elsewhere.

In markets with numerous substitutes, businesses must strive to differentiate their offerings and provide unique value to retain their customers. As competition intensifies and consumers constantly weigh these alternatives, the threat posed by substitutes becomes increasingly pronounced, making it crucial for companies to remain vigilant and responsive to market trends and customer preferences.