Deck 2: E-Commerce Business Models and Concepts

Question 1

________ 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

Answer 1

B

Question 2

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

Answer 2

D

Question 3

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

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

Answer 3

D

Question 4

Which of the following is not a community provider?

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

Question 5

All of the following are using a subscription revenue model for music except:

A)Spotify.
B)Scribd.
C)Rhapsody.
D)Pandora.

Question 6

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

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

Question 7

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 8

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 strategy

Question 9

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 10

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 11

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 12

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

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

Question 13

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

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

Question 14

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 15

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 16

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 17

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)sales revenue model

Question 18

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 19

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 20

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

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

Question 21

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

Question 22

First movers are often not as successful as follower firms.

Question 23

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

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

Question 24

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 25

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 26

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 27

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 28

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

Question 29

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

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

All of the following use a social network marketing strategy except:

A)Twitter.
B)YouTube.
C)Pinterest.
D)Amazon.

Question 32

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

Question 33

The overall retail market in the United States in 2015 was estimated at about:

A)$48 trillion.
B)$4.8 trillion.
C)$480 billion.
D)$48 billion.

Question 34

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)________.

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

Question 35

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

A)market strategy
B)differentiation
C)leverage
D)focus

Question 36

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 37

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 38

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

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

Question 39

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 40

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 41

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

Question 42

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

Question 43

All of the following are examples of business-to-business (B2
B)business models except:

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

Question 44

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

Question 45

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 46

Define elevator pitch and describe its key elements.

Question 47

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

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

Question 48

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 49

Which of the following is not considered a portal?

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

Question 50

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

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

Question 51

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 52

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

Question 53

________ create and sell access to digital markets.

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

Question 54

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 55

All of the following use an advertising revenue model except:

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

Question 56

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 57

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 58

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 59

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 60

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

Question 61

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 62

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 63

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 64

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

Question 65

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

Question 66

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

Question 67

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

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

Question 68

SupplyOn is an example of a(n):

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

Question 69

Which business strategy involves implementing a new, more efficient set of business processes that other firms cannot yet obtain?

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

Question 70

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

Question 71

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

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

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

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

Question 74

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

Question 75

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

Question 76

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 77

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 78

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

Question 79

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 80

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