Final answer:
The statement is true; the Internet does heighten the threat of substitutes by providing new ways for consumers and businesses to fulfill their needs, increasing the competition across local and global markets.
Step-by-step explanation:
The statement that the Internet heightens the threat of substitutes because it creates new ways to accomplish the same task is true. The advent of the internet, coupled with globalization, has significantly transformed the market landscape. Businesses now face increased competition not only locally but from around the world due to advancements in communications technology.
With the internet, consumers and companies can seek out alternative products or services from a global pool, which amplifies the presence of substitute goods and services. For instance, local retailers once only competed with nearby stores but now compete with online platforms offering similar goods potentially at lower prices or with greater convenience.
Similarly, business-to-business markets have expanded, allowing firms to source supplies from a broader range of vendors. Therefore, the degree of competition that many firms face has indeed escalated because of the internet prompting higher threats from substitute offerings.