The threat of substitutes Is part of Porter’s Five Forces model that analyses and isolates the five competitive forces that shape most industries and determines an industry’s strengths and weaknesses. Substitute products or services can be used instead of what you offer to pose a threat. Companies who provide products or services with no close substitutes have more power to increase prices and lock in better terms. When there are several substitutes around the market, It will give customers more options than yours—weakening your ability to charge what you need to make a decent profit.