The
threat of product substitutes becomes high when outside industries create
products at a lower cost with similar benefits. This threat increases the
amount of competition within industries. Available substitute products include
sodas, yogurts, chocolates and other sweet treats. These substitutes may serve
the same purpose to the consumer which is the indulgence and intake of a sugary
substance. In 2000, the
production of ice cream declined 3.5% from the year before compared to the
23-25% increase in competing products. Overall, the threat of product
substitutes is considered to be medium-high in regard to the ice cream
industry. The ability to purchase items at a lower price that essentially
provide the same amount of benefits is the reason for higher competition. 

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