Question

What are indirect competitors?

o o o o
Businesses that have the same or similar investors Incorrect Correct
Businesses that have the same or similar revenue Incorrect Correct
Other businesses that sell products that are different from a business but are similar enough that their products could satisfy the same need Incorrect Correct
Other businesses that sell the same or similar products or services that a company sells Incorrect Correct

Answer 1

Correct answer:
Other businesses that sell products that are different from a business but are similar enough that their products could satisfy the same need.

Explanation:
- Indirect competitors don’t offer the same product, but they solve the same customer problem or fulfill the same need.
- Direct competitors sell the same or very similar products; the fourth option describes direct competition.
- The first two options (same/similar investors or revenue) are not definitions of competition.

Examples:
- A movie theater and Netflix (both satisfy entertainment/time‑pass needs).
- A coffee shop and an energy drink brand (both provide caffeine/alertness).
- A taxi company and a bike‑sharing service (both provide point‑to‑point transport).

Why it matters:
Understanding indirect competitors helps you spot substitution threats, broaden market opportunities, and refine positioning and pricing.