Deck 2: E-Commerce Business Models and Concepts

Question 1

Sharing economy companies are characterized by the free sharing of resources between the company and consumers.

Answer 1

False

Question 2

E-commerce has increased price competition in nearly all markets.

Answer 2

True

Question 3

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

Answer 3

B

Question 4

Which element of the business model relates to the power of customers and suppliers with respect to a business?

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

Question 5

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

Question 6

Scale economies are efficiencies that result from flattening the hierarchy of an organization.

Question 7

All firms need an organization to efficiently implement their business plans and strategies.

Question 8

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

Question 9

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

Question 10

Social technologies change industry structure by shifting programming and editorial decisions to consumers and creating substitute entertainment products.

Question 11

The Internet's universal standards can change industry structure by lowering barriers to entry and intensifying competition within an industry.

Question 12

An asymmetry exists whenever all participants in a market have equivalent resources.

Question 13

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

Question 14

The JOBS Act and issuance of enabling regulations by the Securities and Exchange Commission allows a start-up company to use crowdfunding to solicit accredited investors to invest in small and early-stage start-ups.

Question 15

________ 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) Value proposition; competitive environment
D) Revenue model; market strategy

Question 16

First movers are always more successful than follower firms.

Question 17

All of the following are using a subscription revenue model for e-books except:

A) Amazon.
B) Scribd.
C) Barnes and Noble.
D) Oyster.

Question 18

Which element of the business model addresses the question of why a customer should buy from the firm?

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

Question 19

Firms that fail to produce returns greater than alternative investments typically go out of business.

Question 20

A value proposition defines how a company's product or service fulfills the needs of a customer.

Question 21

The existence of a large number of 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 22

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

A) eHarmony
B) eBay
C) E*Trade
D) Twitter

Question 23

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 24

Which of the following is not a community provider?

A) LinkedIn
B) Facebook
C) Priceline
D) Pinterest

Question 25

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

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

Question 26

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 27

Which of the following involves a company giving away a certain level of product or services 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) transaction fee revenue model

Question 28

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) Starbucks.

Question 29

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

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

Question 30

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 31

Your company has just implemented a new, more efficient set of business processes that other firms cannot yet obtain. This will enable your firm to adopt a strategy of:

A) cost competition.
B) scope.
C) scale.
D) focus.

Question 32

The business model of e-tailers is quite similar to that of:

A) e-distributors.
B) transaction brokers.
C) exchanges.
D) service providers.

Question 33

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

Question 34

Which of the following would be considered an indirect competitor of Travelocity?

A) Priceline
B) Expedia
C) Orbitz
D) TripAdvisor

Question 35

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 36

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 37

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

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

Question 38

All of the following use an advertising revenue model except:

A) Twitter.
B) Yahoo.
C) Google.
D) Amazon.

Question 39

Which of the following is not considered a portal?

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

Question 40

The ability to retain user attention and engagement is an important attribute for which revenue model?

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

Question 41

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

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

Question 42

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 43

W.W. Grainger is an example of which of the following business models?

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

Question 44

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

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

Question 45

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

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

Question 46

Which of the following was not able to successfully implement a freemium business model?

A) Pandora
B) Dropbox
C) LinkedIn
D) Ning

Question 47

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 48

Which of the following statements about Foursquare is not True?

A) Foursquare combines a social network business model with location-based technology.
B) Foursquare began operating without a revenue model.
C) Foursquare's business model faces significant intellectual property concerns.
D) Foursquare has been able to command a high valuation from venture capital investors despite unimpressive revenue and profits.

Question 49

An example of a company using the content provider model is:

A) Priceline.
B) Rhapsody.
C) Dell.
D) eBay.

Question 50

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

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

Question 51

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 52

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 53

________ create and sell access to digital markets.

A) E-distributors
B) Portals
C) E-procurement firms
D) Market creators

Question 54

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 55

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 56

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 57

SupplyOn is an example of a(n):

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

Question 58

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 59

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 60

The overall retail market in the United States in 2017 was estimated at about:

A) $47 trillion.
B) $4.7 trillion.
C) $490 billion.
D) $47 billion.

Question 61

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

Question 62

A(n) ________ is a company that sells products and services that are very similar and in the same market segment.

Question 63

A(n) ________ is the set of activities performed in an industry or in a firm that transforms raw inputs into final products and services.

Question 64

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 65

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.

Question 66

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

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

Question 67

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

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

Question 68

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

Question 69

A(n) ________ is a set of planned activities designed to result in a profit in the marketplace.

Question 70

An industry ________ is an effort to understand and describe the nature of competition in an industry, the nature of substitute products, the barriers to entry, and the relative strength of consumers and suppliers.

Question 71

________ occurs when there are no differences among products or services and the only basis for choosing a particular product or service is price.

Question 72

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 73

The use by a company of its competitive advantage to achieve more advantage in surrounding markets is known as ________.

Question 74

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

Question 75

Personal funds derived from savings, credit card advances, home equity loans, and loans from family and friends are examples of ________ that an entrepreneur may use to get a business off the ground.

Question 76

A wealthy individual who invests personal funds in a start-up in exchange for an equity stock in the business is referred to as a(n) ________.

Question 77

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 78

New technologies that are at the core of a change in the way business is done are referred to as ________ technologies.

Question 79

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

Question 80

A(n) ________ strategy is a strategy to compete in all markets around the globe rather than merely in local, regional, or national markets.