Question 1

Almost all firms partner with others to make their business models work.

Accepted Answer

It is highly likely that firms partner with others to create a network of suppliers, distributors, technology providers, and other stakeholders to create value and meet their business objectives. Partnerships help firms achieve economies of scale, expand their reach and capabilities, pool resources and expertise, reduce risks and costs, and so on. Thus, partnerships are an integral part of modern business models and strategies.

Question 2

Two fatal flaws can render a business model untenable from the beginning: a complete misread of the customer and underutilization of the Internet.

Accepted Answer

The answer of Two fatal flaws can render a business...

Question 3

An arrangement between two or more firms that establishes an exchange relationship but has no joint ownership involved is called a:
A) network
B) trade association
C) consortia
D) joint venture
E) strategic alliance

Accepted Answer

A strategic alliance is an arrangement whereby two or more firms establish an exchange relationship with each other but do not have any joint ownership involved. In a strategic alliance, the firms collaborate together to achieve mutual benefits such as sharing resources, technologies, or expertise. This type of alliance allows firms to achieve their common objectives while maintaining their independence and autonomy.

Question 4

________, a relatively new approach to partnering, takes place when a service provided comes inside a partner's facilities and helps the partner design and manage its supply chain.
A) Permeating
B) Infiltrating
C) Penetrating
D) Fulfilling
E) Insourcing

Accepted Answer

The term that best matches the described approach is insourcing, which refers to the practice of having a service or process provided by a partner's staff or facilities as if they were part of the company or organization. This can apply to various areas, including supply chain management, and typically involves close collaboration and alignment of goals and practices. Permeating, infiltrating, and penetrating all have negative connotations that suggest forceful or harmful entry or invasion, while fulfilling may not encompass the full scope of the described approach.

Question 5

A firm's business model resides within its own boundaries.

Accepted Answer

A firm's business model often involves external partnerships, supply chains, and market interactions, extending beyond its own boundaries.

Question 6

There is no standard business model that dictates how firms in a particular industry should compete.

Accepted Answer

There is no one-size-fits-all approach to business models, and each industry and business will have unique market conditions and factors that influence their competition and success. As such, there is no standard business model that should be followed by all firms in a particular industry. Companies must develop their own strategies and approaches based on their individual goals, strengths, weaknesses, and the competitive landscape they face.

Question 7

The primary activities in a firm's value chain include: inbound logistics, operations, outbound logistics, marketing and sales, and service.

Accepted Answer

This statement is true, as these are the primary activities that create value for a firm and are included in the value chain model.

Question 8

The four components of an effective business model include: core strategy, strategic resources, partnership network, and customer interface.

Accepted Answer

The statement is true. The four components of an effective business model include core strategy, strategic resources, partnership network, and customer interface.

Question 9

Fulfillment and support describes:
A) how a firm manages its customer relationships
B) the way a firm's product or service "goes to market" or how it reaches its customers
C) how a firm manages its employees
D) the products and markets on which a firm will compete
E) how a firm competes relative to its competitors

Accepted Answer

Fulfillment and support refer to the processes and methods a firm uses to deliver its products or services to customers and provide ongoing support, which is essentially how it "goes to market" and reaches its customers.

Question 10

By studying a product's value chain, an organization can identify ways to create additional value and assess whether it has the means to do so.

Accepted Answer

By studying a product's value chain, an organization can identify areas where additional value can be created, such as improving efficiency, reducing costs, or enhancing the quality of the final product. This can help the organization to determine whether it has the resources and capabilities necessary to make these changes and add value to the product.

Question 11

Organizations (typically nonprofit) that are formed by firms in the same industry to collect and disseminate trade information, offer legal and technical advice, furnish industry-related training, and provide a platform for collective lobbying are called:
A) strategic alliances
B) trade associations
C) networks
D) joint ventures
E) consortia

Accepted Answer

Trade associations are specifically formed by firms in the same industry to collectively work towards the betterment of the industry as a whole. They often have goals such as sharing information and best practices, providing industry-specific training, and lobbying for industry-specific regulations. The other answer choices may apply to different types of organizations or collaborations between companies, but do not fit the specific definition of a trade association.

Question 12

Fortunately, if three of the four components of a firm's business model are in place, the firm has a high probability of success.

Accepted Answer

A firm's success typically requires all components of its business model to be effectively in place, as each component plays a critical role in the overall strategy and operation. Missing one could significantly impact the firm's performance and success.

Question 13

The Partnering for Success feature in Chapter 6 focuses on 99designs, an online company that features a "crowdsourcing" model for getting design work done. 99designs' approach to partnering with ________ is the essence of its disruptive business model.
A) professional art studios
B) freelance designers
C) art students
D) Google, Yahoo, and Microsoft
E) art teachers

Accepted Answer

99designs partners with freelance designers who submit designs for contests, allowing businesses to choose the winning design and pay only for that one. This crowdsourcing model disrupts traditional design agencies and allows for more cost-effective design solutions for businesses.

Question 14

In a business model context, the three components of a firm's customer interface are target customer, fulfillment and support, and:
A) pricing structure
B) product/market scope
C) basic for differentiation
D) strategic assets
E) business mission

Accepted Answer

The answer of In a business model context, the three...

Question 15

Gary Smith just launched a firm in the sports drink industry. He has decided to focus his efforts on appealing to extreme sports enthusiasts (examples include hang gliders, rock climbers, and parachutists). In Gary's case, extreme sports enthusiasts represent his firm's:
A) target objective
B) target market
C) goal objective
D) intention market
E) object market

Accepted Answer

A target market refers to a specific group of consumers that a firm aims to sell its products to. In this case, Gary's firm is targeting extreme sports enthusiasts, making them the target market.

Question 16

A clearly articulated business model articulates a company's core logic to all stakeholders, including the firm's employees.

Accepted Answer

A clearly articulated business model explains the rationale behind how a company creates, delivers, and captures value. This is important for all stakeholders, including employees, to understand the company's goals and strategies.

Question 17

A business plan is a firm's plan or diagram for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the profits it earns.

Accepted Answer

A business plan is a formal document detailing a firm's goals, strategies, and financial forecasts, while a business model describes how a firm creates, delivers, and captures value.

Question 18

A hub and wheel configuration with a local firm at the hub organizing the interdependencies of a complex array of firms is referred to as a:
A) trade association
B) strategic alliance
C) network
D) joint venture
E) consortia

Accepted Answer

The hub and wheel configuration with a local firm at the hub organizing the interdependencies of a complex array of firms is a common feature of a network. In such a configuration, the hub acts as a central coordinating entity that manages the flow of goods, services, and information between the firms that are part of the network. Trade associations, strategic alliances, joint ventures, and consortia are all different forms of partnerships between firms, but they do not necessarily involve a centralized hub and wheel configuration. Hence, the best choice for this scenario is a network.

Question 19

A firm's ________ is the limited group of individuals or businesses that it goes after or tries to appeal to.
A) target objective
B) goal objective
C) intention market
D) target market
E) object market

Accepted Answer

A firm's target market is the specific group of individuals or businesses it aims to reach with its products or services. This group is defined by factors such as demographics, psychographics, and behavior patterns. By identifying and targeting a specific market, a firm can tailor its marketing efforts and product offerings to better meet the needs and preferences of that particular group, which can help improve the effectiveness and efficiency of its marketing strategies.

Question 20

A ________ is a group of organizations with similar needs that band together to create a new entity to address those needs.
A) joint venture
B) network
C) consortia
D) strategic alliance
E) trade association

Accepted Answer

Consortia refers to a group of organizations with similar needs that join together to form a new entity to address those needs. Joint venture refers to a partnership between two or more organizations formed to achieve a specific goal or complete a specific project. A network is a group of interconnected people or organizations. A strategic alliance is a formal or informal agreement between two or more organizations to work together to achieve a mutually beneficial goal. A trade association is a group of companies in the same industry that work together to promote the interests of their industry.

Quiz 6: Developing an Effective Business Model

Almost all firms partner with others to make their business models work.

Two fatal flaws can render a business model untenable from the beginning: a complete misread of the customer and underutilization of the Internet.

An arrangement between two or more firms that establishes an exchange relationship but has no joint ownership involved is called a:

________, a relatively new approach to partnering, takes place when a service provided comes inside a partner's facilities and helps the partner design and manage its supply chain.

A firm's business model resides within its own boundaries.

There is no standard business model that dictates how firms in a particular industry should compete.

The primary activities in a firm's value chain include: inbound logistics, operations, outbound logistics, marketing and sales, and service.

The four components of an effective business model include: core strategy, strategic resources, partnership network, and customer interface.

Fulfillment and support describes:

By studying a product's value chain, an organization can identify ways to create additional value and assess whether it has the means to do so.

Organizations (typically nonprofit) that are formed by firms in the same industry to collect and disseminate trade information, offer legal and technical advice, furnish industry-related training, and provide a platform for collective lobbying are called:

Fortunately, if three of the four components of a firm's business model are in place, the firm has a high probability of success.

The Partnering for Success feature in Chapter 6 focuses on 99designs, an online company that features a "crowdsourcing" model for getting design work done. 99designs' approach to partnering with ________ is the essence of its disruptive business model.

In a business model context, the three components of a firm's customer interface are target customer, fulfillment and support, and:

Gary Smith just launched a firm in the sports drink industry. He has decided to focus his efforts on appealing to extreme sports enthusiasts (examples include hang gliders, rock climbers, and parachutists) . In Gary's case, extreme sports enthusiasts represent his firm's:

A clearly articulated business model articulates a company's core logic to all stakeholders, including the firm's employees.

A business plan is a firm's plan or diagram for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the profits it earns.

A hub and wheel configuration with a local firm at the hub organizing the interdependencies of a complex array of firms is referred to as a:

A firm's ________ is the limited group of individuals or businesses that it goes after or tries to appeal to.

A ________ is a group of organizations with similar needs that band together to create a new entity to address those needs.