Items that decrease sales of products within an industry are substitute products. For example, frozen yogurt is considered a substitute for ice cream. Sport utility vehicles (SUVs) can be considered a substitute product to the automobile. Substitutes can be viewed in two ways. They can be viewed negatively by the industry because they siphon off revenue from auto sales.

The other perspective is that substitute products add to the breadth of the industry by creating opportunities that increase the overall market. Auto companies have enjoyed higher profits because the SUVs have higher margins. This has prompted Mercedes Benz to widen its product offering to include this type of vehicle.