Question 1

Business model innovation always means using the Internet to replace face-to-face transactions

Accepted Answer

Business model innovation can involve the use of the internet, but it does not always mean replacing face-to-face transactions. It can also involve creating new products or services, changing pricing strategies, or finding new ways to reach customers.

Question 2

Cost structure refers to:&#10;A)The financing mechanisms for new company buildings&#10;B)A breakdown of all the sources of cost in setting up and running a business&#10;C)A module on a business administration course&#10;D)A method for calculating sales revenue

Accepted Answer

Cost structure refers to the breakdown of all the sources of cost in setting up and running a business, which includes expenses such as rent, salaries, materials, and overhead costs. It helps businesses understand and manage their expenses and create a pricing strategy for their products or services. The other options - A, C, and D - are not related to the concept of cost structure.

Question 3

Business models are a useful tool only applicable to internet start-ups

Accepted Answer

Business models are applicable to all types of businesses, whether they are internet start-ups or not.

Question 4

Which of these is not an example of a revenue stream?&#10;A)Money coming in from direct sales&#10;B)Money coming in from rental activities&#10;C)Money coming in from licence fees&#10;D)Money picked up in the street which someone has unfortunately dropped

Accepted Answer

Money picked up in the street which someone has unfortunately dropped is not a reliable or consistent source of income and cannot be considered a revenue stream. A revenue stream is a source of income that is consistent and reliable, such as direct sales, rental activities, and license fees.

Question 5

'Servitization' is:&#10;A)A training course for sales staff&#10;B)A term used to describe shifting from a business model in manufacturing focused on creating and delivering products to one which stresses customer value through wrapping services around core products&#10;C)A phrase used to describe Amazon's business strategy&#10;D)A software feature in new cars

Accepted Answer

Servitization is the term used to describe shifting from a business model in manufacturing focused on creating and delivering products to one which stresses customer value through wrapping services around core products.

Question 6

Which of these is not an example of a disruptive business model?&#10;A)Air BnB in the hotel/hospitality sector&#10;B)Uber in the taxi/car hire sector&#10;C)Low cost airlines&#10;D)Offering a 'freemium' trial for new software

Accepted Answer

Offering a "freemium" trial for new software is not an example of a disruptive business model because it does not fundamentally change the industry or the way that the product or service is delivered. It is simply a pricing strategy or a way to attract new customers. In contrast, the other examples listed fundamentally disrupted their industries by introducing new technology, new pricing models, or new ways of delivering services.

Question 7

Which of these is not a useful feature of the business model concept:&#10;A)It provides a roadmap to show how value is created by an organization&#10;B)It provides a way of sharing the core business idea with others, making the 'business vision' explicit&#10;C)It offers a helpful checklist of areas to consider in making sure the idea and the route to creating value is well thought through&#10;D)It offers a useful marketing slogan for the business

Accepted Answer

The business model concept provides useful tools and strategies for creating and delivering value to customers, sharing the core business idea with others, and making sure the idea and route to creating value is well thought through. However, it does not offer a useful marketing slogan for the business.

Question 8

A value proposition is:&#10;A)A description of the way in which value is created by an innovative idea for a potential end customer or user&#10;B)A method of calculating sales price for a new product&#10;C)An online marriage proposal&#10;D)An estimate of the return on investment for an innovation project

Accepted Answer

A value proposition is a statement that explains how a company's product or service solves customers' problems or meets their needs in a unique way that differentiates it from competitors. It is a description of the value that a company creates for its customers.

Question 9

A business model is:&#10;A)a promotional gift offered by companies at Christmas time&#10;B)a form of cash flow analysis&#10;C)a framework for describing how value is created and captured&#10;D)an idea for a new venture in the toy sector

Accepted Answer

A business model is essentially a framework that describes how a company creates and captures value. It outlines the way a business plans to operate and generate revenue, including its target customers, pricing strategy, cost structure, and distribution channels.

Deck 16: Business Models and Capturing Value