The Internet can both reduce and increase the bargaining power of suppliers, depending on the specific circumstances.

True / False.

True

Explanation:

Internet can reduce bargaining power of suppliers:

Internet is a powerful means which has strengthen competitiveness in organizations. This has led to competition which results in price wars. This decreases the bargaining power of suppliers as the competition among different suppliers intensifies and the need of the buyers to buy only from a few suppliers is lessened. This also results in the increased bargaining power of buyers. Internet enables buyers to save their time and money and has increased transparency e. g. services costs which resulted in increase bargaining power of buyers while reducing the bargaining power of suppliers. This transparency increased price competition and competitiveness. Consequently buyers are less loyal to certain suppliers and can choose the suppliers who meet their requisites.

Internet can increase bargaining power of suppliers:

Through internet the bargaining power of suppliers can be increased. The internet has given a cost effective platform to suppliers to reach to their customers which has increased competition between suppliers. Suppliers can access more customers and provides better services to them. With internet connectivity suppliers can directly communicate with their customers. The internet can increase the bargaining power of suppliers by allowing reduction of entry barriers and increasing number of competitors.