Question 1

Amazon does not open its website up to third-party sellers.

Accepted Answer

Amazon does open its website up to third-party sellers, who can create seller accounts and list their products for sale on the Amazon platform.

Question 2

Amazon got its start selling games online.

Accepted Answer

Amazon initially started as an online bookstore before expanding into a wide variety of products and services.

Question 3

Many pundits assumed Amazon would fail. Why?
A) the firm was losing money and competing against established, well known, offline brands who were going online.
B) Amazon was too short-term focused.
C) the firm was based in Seattle, rather than Silicon Valley.
D) Amazon sales were not increasing.
E) all of the above.

Accepted Answer

At the time of its launch, Amazon was losing money, and it faced established, well-known, offline brands that were also moving online. This made many pundits assume that Amazon would fail.

Question 4

Amazon shelves are specifically stocked so that similar items are not placed next to each other.

Accepted Answer

The answer of Amazon shelves are specifically stocked so that...

Question 5

Amazon's success strategy is based on the focus on its quarterly results.

Accepted Answer

Amazon's success strategy is based on customer obsession and long-term growth rather than short-term focus on quarterly results.

Question 6

Amazon went seven whole years without turning a profit.

Accepted Answer

Amazon did not turn a profit until 2003, seven years after its inception in 1996.

Question 7

Which of the following is not a firm that has received an investment from Jeff Bezos?
A) Uber
B) Twitter
C) BlueOrigin
D) The Washington Post
E) Bezos has invested in all of the above businesses.

Accepted Answer

The answer of Which of the following is not a...

Question 8

Initially, Amazon adopted the domain of a non-profit organization.

Accepted Answer

Amazon initially registered under the domain "amazon.com" as a commercial entity, not under a non-profit domain.

Question 9

Amazon owns the inventory that third-party sellers provide via the 'Fulfillment by Amazon' service.

Accepted Answer

Third-party sellers own the inventory they provide via the 'Fulfillment by Amazon' service, but Amazon does store, pack, and ship the products on the seller's behalf.

Question 10

Which of the following is true of Amazon?
A) Amazon made profits from the first year of its operation.
B) It has limited its products to only electronic devices.
C) Its cloud computing business is one of the largest players in that category.
D) Its profitability has remained constant over the years and analysts continue to predict profits for the firm's future.
E) Amazon concentrates more on its quarterly results and is inflexible on details about its vision.

Accepted Answer

Amazon's cloud computing business, Amazon Web Services (AWS), is one of the largest players in that category. A, B, D, and E are all false statements.

Question 11

In order to automate profit-pushing hyper-efficiency, Amazon warehouses are powered by at least as much code as the firm's website.

Accepted Answer

Amazon's warehouses are highly automated and use a complex system of robotics and algorithms to manage inventory, fulfill orders, and optimize efficiency. This requires a significant amount of code, which is comparable to the amount used to power the company's website.

Question 12

The three pillars of Amazon's business are large selection, convenience, and lower prices.

Accepted Answer

Amazon's business model has always revolved around providing a vast selection of products, offering unparalleled convenience through options like Prime delivery and one-click ordering, and ensuring competitive prices for customers. These three pillars remain the cornerstone of Amazon's success, even as the company has expanded into new markets and services.

Question 13

Tech-fueled operations cannot yield greater profits than off-line players.

Accepted Answer

Tech-fueled operations can often yield greater profits than off-line players, as technology can improve efficiency, reduce costs, and reach a wider customer base.

Question 14

While so many managers focus on what's changing in tech-fueled industries, Bezos feels that building strategy based on factors that are NOT going to change is critically important.

Accepted Answer

This statement accurately represents Jeff Bezos' philosophy on building strategy for his company. In his 2016 letter to shareholders, he wrote, "I very frequently get the question: ‘What’s going to change in the next 10 years?’ And that is a very interesting question; it’s a very common one. I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two – because you can build a business strategy around the things that are stable in time."

Question 15

Accounts payable periods do not vary.

Accepted Answer

Accounts payable periods can vary depending on the payment terms negotiated between the buyer and the supplier. For example, some payment terms may require payment within 30 days while others may allow for payment within 60 or 90 days.

Question 16

Which of the following strategies was followed by Amazon's founder?
A) He focused more on Amazon's quarterly results.
B) He postponed profit harvesting.
C) He reduced warehousing capacity.
D) He consciously ignored cloud computing platforms.
E) He built e-commerce operations only for Amazon's customers in the United States.

Accepted Answer

Jeff Bezos, Amazon's founder, chose to postpone profit harvesting and instead invested heavily in the company's growth, infrastructure, and expansion. This strategy enabled Amazon to become a dominant player in the e-commerce industry and eventually branch out into other markets, such as cloud computing.

Question 17

The use of Kiva robots has also allowed Amazon to radically reduce headcount, saving the firm additional money by cutting its workforce.

Accepted Answer

While Kiva robots (now Amazon Robotics) have automated some tasks in Amazon's warehouses, leading to increased efficiency and productivity, Amazon has continued to grow its workforce significantly over the years, indicating that the use of robots has not led to a radical reduction in headcount.

Question 18

By allowing third parties to make products available through Amazon, the firm strengthens network effects for competitive advantage.

Accepted Answer

By allowing third party sellers to offer their products on Amazon, the platform expands its product range and attracts more customers, strengthening its network effects. This leads to a competitive advantage over other e-commerce platforms.

Question 19

Amazon PrimeAir is the name of Jeff Bezos' commercial rocketry and aviation firm.

Accepted Answer

Amazon PrimeAir is actually the name of Amazon's drone delivery service, not a rocketry and aviation firm owned by Jeff Bezos.

Question 20

One of the reasons Amazon has struggled to achieve profitability is because the firm has a negative cash conversion cycle.

Accepted Answer

Amazon actually benefits from a negative cash conversion cycle, which means it sells products and collects payments from customers before it has to pay its suppliers, improving its cash flow and contributing to its financial success.

Quiz 7: Amazoncom: an Empire Stretching From Cardboard Box to Kindle to Cloud