A new model is presented to analyze reliability for systems subjected to competing risks of a typical degradation process and external random shocks. The external random shocks may cause hard failure and instantaneous increases in the degradation process. Random shocks are classified into three types in the new model according to their sizes. Different types will lead to different instantaneous increases in the degradation process. Besides system reliability, the competing failure probabilities are also studied. Competing failure probability indicates the probability that one risk mode fails while the other risk mode does not fail. Competing failure probabilities are helpful in determining which risk mode is more likely to occur during a system’s lifetime. It is impractical if both risk modes fail together for systems under competing failure modes, while the system reliability and failure probabilities, which are simply calculated by expression, do not resolve this impractical situation. The modified values of system reliability and competing failure probability are calculated in this paper with the impractical situation excluded. The effectiveness of the presented model is demonstrated by the reliability analysis of the micro-electromechanical system (MEMS), which proved that the probabilities calculated using this method are more practical. In addition, sensitivity analysis is performed for specific parameters.