Question 1

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

Accepted Answer

Sharing economy companies facilitate the sharing of resources between consumers, often for a fee, rather than free sharing between the company and consumers.

Question 2

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

Accepted Answer

E-commerce has made it easier for consumers to compare prices and products from different sellers, leading to more competition and potentially lower prices in almost all markets.

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

Accepted Answer

Amazon's primary value propositions are selection and convenience. They offer a vast selection of products and provide convenience through their online platform and fast shipping options. While personalization and customization may be available to some extent, it is not their primary value proposition. Similarly, while Amazon does work to reduce price discovery cost, it is not a primary value proposition. Management of product delivery is a part of their service but not a primary value proposition.

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

Accepted Answer

The competitive environment element of the business model relates to the power of customers and suppliers. This includes factors such as the bargaining power of customers and suppliers, and the intensity of competition in the industry.

Question 5

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

Accepted Answer

SaaS and PaaS providers can spread their fixed costs over a larger number of customers, resulting in lower costs per customer. This is known as scale economies.

Question 6

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

Accepted Answer

Scale economies are efficiencies that result from increasing the scale of operations, not flattening the hierarchy.

Question 7

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

Accepted Answer

An organization provides structure and direction for a firm to effectively carry out its plans and strategies, therefore all firms need an organization.

Question 8

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

Accepted Answer

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.

Accepted Answer

By allowing customers to customize their products, it creates a uniqueness that substitutes cannot replicate, thus 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.

Accepted Answer

Social technologies empower consumers to make decisions about content and entertainment, which can affect industry structure by creating substitute products and changing the traditional roles of producers and distributors.

Question 11

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

Accepted Answer

The Internet's universal standards have indeed lowered barriers to entry by making it easier for new players to enter markets and compete with established firms. This has in turn intensified competition across many industries, changing their overall structure.

Question 12

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

Accepted Answer

An asymmetry exists when some participants in a market have more resources or information than others, leading to an unequal distribution of power and potential advantage.

Question 13

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

Accepted Answer

Strong linkages with customers typically increase switching costs, as customers may find it more difficult or costly to switch to a competitor due to established relationships, loyalty programs, or integrated services.

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.

Accepted Answer

The JOBS Act and SEC regulations allow for crowdfunding to accredited investors for 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

Accepted Answer

The value proposition, which describes what value the company offers to its customers, and the revenue model, which explains how the company generates revenue, are the most easily identifiable aspects of a company's business model. Market strategy, market opportunity, and competitive environment are important components of a business model, but they may not be as easy to identify as the value proposition and revenue model.

Question 16

First movers are always more successful than follower firms.

Accepted Answer

First movers can gain advantages such as brand recognition and customer loyalty, but they also face risks like high research and development costs and market uncertainty. Follower firms can learn from first movers' mistakes and improve upon their products or services.

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.

Accepted Answer

Barnes and Noble does not offer a subscription revenue model for e-books. They primarily sell e-books on a per-title basis, although they do offer a membership program that provides discounts on e-books and other products. Amazon, Scribd, and Oyster all offer subscription models where customers pay a monthly fee to access a library of e-books.

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

Accepted Answer

The value proposition element of the business model addresses the question of why a customer should buy from the firm by highlighting the unique benefits or value that the firm offers to its customers compared to competitors. The revenue model refers to how the firm will generate revenue, the competitive advantage refers to what sets the firm apart from competitors, and the market strategy refers to how the firm plans to reach and target customers.

Question 19

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

Accepted Answer

This statement is true. If a firm does not generate returns that are higher than alternative investment options, investors will choose to invest their money elsewhere, leading to a lack of funding and, ultimately, the firm going out of business.

Question 20

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

Accepted Answer

A value proposition is a promise of the benefits a customer will receive by using a particular product or service. It identifies how the product or service solves a customer's problem or fulfills a need, and sets the product apart from its competitors.

Quiz 2: E-Commerce Business Models and Concepts

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

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

First movers are always more successful than follower firms.

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

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

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

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