What is indirect competition? Definition
Indirect competition occurs when two or more companies offer two different products or services that can be substituted. Companies compete for different but similar markets.
Indirect competition is different from direct competition. The latter occurs when two or more businesses essentially offer the same product or service at the same location, or are available at the same location. Companies compete for the same market.
Examples of indirect competition
Indirect competition is commonly found in everyday life .
Take the example of catering.
Two fast food restaurants like McDonald’s or Burger King will be in direct competition because they offer the same products and the same services.
However, these restaurants are also in competition with other restaurants, such as traditional restaurants, food-trucks (mobile restaurants), cafeterias or sandwich shops. These other restaurants are indirect competition, they do not sell fast food but still sell food and it can be substituted for that of fast food.