Deck 5: E-Commerce Business Strategies

Question 1

Which of the following involves a company giving away a certain level of product or service without charge, but then charging a fee for premium levels of the product or service?

A) advertising revenue model
B) subscription revenue model
C) freemium strategy
D) premium strategy

Answer 1

C

Question 2

________ and ________ are typically the most easily identifiable aspects of a company's business model.

A) Market strategy; market opportunity
B) Value proposition; revenue model
C) Competitive advantage; competitive environment
D) Revenue model; market opportunity

Answer 2

B

Question 3

Which of the following is not a variation of the e-tailer business model?

A) bricks-and-clicks
B) virtual merchant
C) market creator
D) manufacturer-direct

Answer 3

C

Question 4

Which of the following is an example of the affiliate revenue model?

A) Scribd
B) eBay
C) L.L. Bean
D) MyPoints

Question 5

Which of the following is not a community provider?

A) LinkedIn
B) Facebook
C) Blue Nile
D) Pinterest

Question 6

A perfect market is one in which:

A) there are no competitive advantages or asymmetries because all firms have equal access to all the factors to production.
B) one firm develops an advantage based on a factor of production that other firms cannot purchase.
C) one participant in the market has more resources than the others.
D) competition is at a minimum, as each niche market within an industry is served by the company with the greatest competitive advantage.

Question 7

Organizations that typically provide an array of services to startup companies along with a small amount of funding are referred to as:

A) angel investors.
B) crowdfunders.
C) incubators.
D) venture capital investors.

Question 8

All of the following can be considered a direct competitor of Priceline except:

A) Travelocity.
B) Expedia.
C) Orbitz.
D) ESPN.

Question 9

All of the following can be considered a direct or indirect competitor of Amazon except:

A) eBay.
B) Apple's iTunes Store.
C) Walmart.
D) Priceline.

Question 10

Which element of the business model refers to the presence of substitute products in the market?

A) value proposition
B) competitive environment
C) competitive advantage
D) market opportunity

Question 11

Which of the following does not use a subscription revenue model?

A) Apple Music
B) eHarmony
C) Ancestry
D) Twitter

Question 12

Stickiness is an important attribute for which of the following revenue models?

A) advertising revenue model
B) subscription revenue model
C) transaction fee revenue model
D) affiliate revenue model

Question 13

The existence of many competitors in any one market segment may indicate:

A) an untapped market niche.
B) the market is saturated.
C) no one firm has differentiated itself within that market.
D) a market that has already been tried without success.

Question 14

Which of the following companies uses a transaction fee revenue model?

A) Yahoo
B) E*Trade
C) Twitter
D) Birchbox

Question 15

Which element of the business model addresses what a firm provides that other firms do not and cannot?

A) competitive environment
B) competitive advantage
C) market strategy
D) value proposition

Question 16

A ________ specifically details how you plan to find customers and to sell your product.

A) sales analysis
B) business plan
C) competitive strategy
D) market strategy

Question 17

Which of the following factors is not a significant influence on a company's competitive environment?

A) how many competitors are active
B) what the market share of each competitor is
C) the availability of supportive organizational structures
D) how competitors price their products

Question 18

A firm's ________ describes how a firm will produce a superior return on invested capital.

A) value proposition
B) revenue model
C) market strategy
D) competitive advantage

Question 19

Which of the following are Amazon's primary value propositions?

A) personalization and customization
B) selection and convenience
C) reduction of price discovery cost
D) management of product delivery

Question 20

Which of the following uses a subscription revenue model for books?

A) Spotify
B) Amazon Kindle Unlimited
C) Rhapsody
D) Pandora

Question 21

A value proposition defines how a company's product or service will generate revenue for the firm.

Question 22

Which of the following is an example of a company using the content provider model?

A) Priceline
B) Netflix
C) Dell
D) eBay

Question 23

Real markets are imperfect.

Question 24

Which of the following uses a subscription-based sales revenue model?

A) Yahoo
B) eBay
C) MyPoints
D) Dollar Shave Club

Question 25

Which of the following is an unfair competitive advantage?

A) brand name
B) access to global markets
C) lower product prices
D) superior technology

Question 26

Slow followers are sometimes more successful than first movers.

Question 27

All of the following can be considered examples of the market creator business model except:

A) eBay.
B) Priceline.
C) Uber.
D) Twitter.

Question 28

In general, the key to becoming a successful content provider is to:

A) own the content being provided.
B) own the technology by which content is created, presented, and distributed.
C) provide online content for free.
D) provide other services as well as online content.

Question 29

Which of the following statements about Foursquare is not true?

A) Foursquare combines a social network business model with location-based technology.
B) Foursquare initially struggled to find profitability.
C) The growth in Foursquare's revenue since 2015 has been driven primarily by significant increases in the numbers of users of its Swarm app.
D) Foursquare's users are typically amenable to having their location tracked and their data collected, since tracking users' location is the express purpose of the app.

Question 30

Which of the following is another name for a revenue model?

A) business model
B) business strategy
C) financial model
D) financial statements

Question 31

Which of the following is not a key element of an elevator pitch?

A) exit strategy
B) growth metrics
C) legal structure
D) market opportunity

Question 32

In the subscription revenue model, a company primarily generates income from the display of ads.

Question 33

Which of the following is not an example of the bricks-and-clicks e-tailing business model?

A) Walmart
B) Target
C) Bluefly
D) Staples

Question 34

Which type of investor typically becomes interested in a startup company after it has begun generating revenue?

A) incubators
B) angel investors
C) crowdfunders
D) venture capital investors

Question 35

Information asymmetries enable some firms to have an edge over others.

Question 36

In 2019, the overall global retail market was estimated to be about:

A) $2.5 trillion.
B) $25 trillion.
C) $250 trillion.
D) $250 billion.

Question 37

All of the following may lead to a competitive advantage except:

A) less expensive suppliers.
B) better employees.
C) fewer products.
D) superior products.

Question 38

________ is defined by company using its competitive advantage to gain in surrounding markets.

A) Market strategy
B) Differentiation
C) Leverage
D) Focus

Question 39

Which of the following gives a business model the most credibility with outside investors?

A) the firm's management team
B) the firm's value proposition
C) the firm's market opportunity
D) the firm's market strategy

Question 40

A wealthy individual who invests personal funds in a startup in exchange for an equity share in the business is referred to as a(n):

A) incubator.
B) angel investor.
C) venture capital investor.
D) crowdfunder.

Question 41

In the ________ business model, a web-based business builds a digital environment in which buyers and sellers can meet, display products, search for products, and establish prices.

A) market creator
B) community provider
C) e-tailer
D) portal

Question 42

The financial services, travel services, and job placement services industries typically use the ________ business model.

A) community provider
B) transaction broker
C) market creator
D) e-tailer

Question 43

Define organizational development and describe its importance in relation to the implementation of a business plan and strategy.

Question 44

Which of the following is not considered a portal?

A) Yahoo
B) MSN
C) Amazon
D) AOL

Question 45

On-demand service companies are characterized by the free sharing of resources between the company and consumers.

Question 46

All of the following are business models employed in the online music industry except:

A) subscription.
B) peer-to-peer streaming.
C) download-and-own.
D) cloud streaming.

Question 47

What is the primary revenue model for an e-distributor?

A) sales
B) transaction fee
C) advertising
D) subscription

Question 48

All of the following are examples of business-to-business (B2B) business models except:

A) e-distributors.
B) e-procurement.
C) exchanges.
D) portals.

Question 49

All of the following use an advertising revenue model except:

A) Facebook.
B) Yahoo.
C) Google.
D) Walmart.

Question 50

Why is the management team such an important element of a business model?

Question 51

Define and describe the transaction broker business model and discuss the eight components of the business model for this type of B2C firm.

Question 52

Amazon Business is an example of which of the following business models?

A) B2B service provider
B) exchange
C) e-distributor
D) industry consortia

Question 53

Portals primarily generate revenue in all of the following ways except:

A) charging advertisers for ad placement.
B) collecting transaction fees.
C) sales of goods.
D) charging subscription fees.

Question 54

Who are the e-commerce enablers and why are they important?

Question 55

First movers often fail because:

A) their competitive advantage is unfair.
B) they lack complementary resources needed to sustain their advantages.
C) they are operating in a perfect market.
D) they fail to leverage their competitive assets.

Question 56

Ariba is an example of a(n)________.

A) e-distributor
B) portal
C) e-procurement firm
D) Industry consortium

Question 57

The basic value proposition of community providers is:

A) they offer a fast, convenient one-stop site where users can focus on their most important concerns and interests.
B) they offer consumers valuable, convenient, time-saving, and low-cost alternatives to traditional service providers.
C) they create a digital electronic environment for buyers and sellers to meet, agree on a price, and transact.
D) they increase customers' productivity by helping them get things done faster and more cheaply.

Question 58

Define elevator pitch and describe its key elements.

Question 59

The Jumpstart Our Business Startups (JOBS) Act, and issuance of enabling regulations by the Securities and Exchange Commission, allows a start-up company to use crowdfunding to solicit investors to invest in small and early-stage startups.

Question 60

eBay uses all of the following business models except:

A) B2C market creator.
B) C2C market creator.
C) content provider.
D) e-commerce infrastructure provider.

Question 61

________ technologies are technologies that enable the incremental improvement of products and services.

A) Sustaining
B) Differentiating
C) Disruptive
D) Commodity

Question 62

Which of the following is not a primary activity in a firm value chain?

A) outbound logistics
B) finance/accounting
C) operations
D) after-sales service

Question 63

A ________ marketplace supplies products and services of interest to particular industries.

A) perfect
B) differentiated
C) horizontal
D) vertical

Question 64

Interactivity that enables product customization alters industry structure by decreasing the threat of substitutes.

Question 65

Scale economies are efficiencies that result from increasing the size of the business.

Question 66

Over the past decade, the number of exchanges has:

A) greatly increased.
B) diminished sharply.
C) stayed about the same.
D) increased slowly but steadily.

Question 67

The Seam is an example of a(n):

A) private industrial network.
B) exchange.
C) industry consortium.
D) e-distributor.

Question 68

Innovative entrepreneurs and their business firms that destroy existing business models are referred to as:

A) crowdfunders.
B) venture capitalists.
C) disruptors.
D) angel investors.

Question 69

What is a B2B exchange, and what benefits do they offer? Given those benefits, why are they currently only a small part of the overall B2B picture?

Question 70

A company's strong linkages with its customers increase switching costs.

Question 71

A strategy designed to compete within a narrow market or product segment is called a ________ strategy.

A) scope
B) differentiation
C) commoditization
D) focus

Question 72

Which of the following features of e-commerce technology changes industry structure by lowering barriers to entry but greatly expands the market at the same time?

A) global reach
B) richness
C) interactivity
D) personalization

Question 73

The Internet's universal standard have changed industry structure by increasing barriers to entry and decreasing competition within an industry.

Question 74

A ________ is a networked business ecosystem that coordinates a firm's suppliers, distributors, and delivery firms with its own production needs using an Internet-based supply chain management system.

A) value chain
B) value system
C) value web
D) business strategy

Question 75

A ________ refers to a competitive strategy in which firms attempt to achieve lower business process costs.

A) strategy of cost competition
B) scope strategy
C) customer intimacy strategy
D) focus/market niche strategy

Question 76

SaaS and PaaS providers can typically provide services at lower costs through scale economies.

Question 77

E-commerce has increased price competition in many markets.

Question 78

If you wished to leverage the ubiquitous nature of the Web to differentiate your product, you would:

A) enable individual customization of the product by consumers.
B) implement a strategy of commoditization.
C) adopt a strategy of cost competition.
D) develop a scope strategy to compete within a narrower market segment.

Question 79

Which of the following may offer its customers value chain management software?

A) e-distributors
B) e-procurement companies
C) exchanges
D) community providers

Question 80

The term unfit fitness refers to a situation in which employees of a firm have the wrong skills for the current environment.