In this paper, a novel multistage reliability model is provided as systems are often divided into many stages according to system degradation characteristics. Multistage hard failure (caused by random shock) process (MHFP) and multistage soft failure (caused by random shock and continuous degradation) process (MSFP) are introduced to describe the competing failure processes, where either the MSFP or MHFP would break down the system. The shock processes impact the system in three ways: (1) fatal load shocks cause hard failure immediately in the hard failure process; (2) time shocks cause a hard failure threshold changing;(3) damage load shocks cause degradation level increasing in the soft failure process. In this paper, a density function dispersion method is carried out to address the multistage reliability model, and the effectiveness of the proposed models is demonstrated by reliability analysis with the one-stage model. Finally, the multistage model is applied to a case study, the degradation process is divided into three stages, and the hard failure threshold can be transmitted twice. The proposed model can be applied in other multistage situations, and the calculation method can satisfy the accuracy requirements.