In Porter's Five Competitive Forces model, "competition from substitute goods or services" refers to

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"Competition from substitute goods or services" refers specifically to substitute products that come from outside the industry. This could include products or services that fulfill the same need or desire as the industry's offerings, but are produced by different companies or industries altogether (such as using a streaming service instead of purchasing a DVD). Domestic or foreign competitors within the same industry would fall under the category of "rivalry among existing competitors" in Porter's Five Forces model. The outsourcing practices of producers of substitutes would not be relevant to this particular force.

In Porter's Five Competitive Forces Model, "Competition from Substitute Goods