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

Which element of the business model examines who else occupies the firm's intended marketspace?

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

Answer 2

B

Question 3

Most first movers have the complementary resources needed to sustain their advantage.

Answer 3

False

Question 4

Real markets are perfect markets.

Question 5

Visitors to specialized niche vortals tend to spend less money than the average visitor to a horizontal portal.

Question 6

The Internet's universal standards decrease the cost of industry and firm operations.

Question 7

Barriers to entry into the e-tail marketplace are high.

Question 8

In order to be considered successful, a firm must produce returns greater than alternative investments.

Question 9

Differentiation refers to situations in which there is little difference between products and the only basis of choosing a product is price.

Question 10

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

Question 11

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

Question 12

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 13

All of the following are key elements of a business model except:

A) competitive environment.
B) organizational development.
C) information technology strategy.
D) market strategy.

Question 14

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

Question 15

Interfirm rivalry is one area of the business environment where e-commerce technologies have had an impact on most industries.

Question 16

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

Question 17

An asymmetry exists whenever one participant in a market has more resources than other participants.

Question 18

Social technologies change industry structure by shifting programming and editorial decisions to consumers.

Question 19

The terms revenue model and financial model can be used interchangeably.

Question 20

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 21

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 22

All of the following use an advertising revenue model except:

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

Question 23

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

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

Question 24

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

A) Yahoo
B) eBay
C) Gap.com
D) MyPoints

Question 25

Assume you are analyzing the market opportunity of a distance learning company, Learnmore.com, that creates education courses delivered over the Internet for the Fortune 1000 corporate market. Assume that the overall size of the distance learning market is $25 billion. The overall market can be broken down into three major market segments: Corporate, College, and Elementary/High School, each of which accounts for a third of the market. Within the Corporate market, there are two market niches: Fortune 1000, which accounts for 60% of the market, and all others, which together account for 40% of the market. What is Learnmore.com's realistic market opportunity, approximately?

A) $5 billion
B) $6.6 billion
C) $165 billion
D) $25 billion

Question 26

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 27

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 28

All of the following can be considered a direct or indirect competitor of Amazon.com except:

A) eBay.
B) Apple's iTunes Store.
C) Barnesandnoble.com.
D) Starbucks.

Question 29

Which of the following is not a community provider?

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

Question 30

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

A) WSJ.com
B) E*Trade
C) Twitter
D) Sears.com

Question 31

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 32

Horizontal or general 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 33

Which of the following would be considered an indirect competitor of American Airlines?

A) JetBlue
B) Zipcar
C) Orbitz
D) British Airways

Question 34

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

A) Ancestry.com
B) eBay
C) Amazon
D) Twitter

Question 35

All of the following statements about Groupon are true except:

A) Groupon has yet to show a profit.
B) Groupon combines two major trends in e-commerce: localization and social networks.
C) It is unclear if Groupon's business model is sustainable.
D) Groupon believes it must scale up fast in a winner-take-all market.

Question 36

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 37

Which of the following is not considered a portal?

A) Yahoo
B) MSN
C) WSJ.com
D) AOL

Question 38

Your solar-panel manufacturing firm has developed a unique and patented process for creating high-efficiency solar panels at a fraction of current costs. This will enable your firm to adopt a strategy of:

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

Question 39

Stickiness 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 40

A business document that specifically details how you plan on selling your product and find new customers is called a:

A) sales analysis.
B) business plan.
C) competitive strategy.
D) market strategy.

Question 41

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 42

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

A) e-distributors.
B) e-procurement.
C) private industrial networks.
D) e-tailers.

Question 43

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 44

Expedia is an example of a:

A) community provider.
B) transaction broker.
C) market creator.
D) service provider.

Question 45

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

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

Question 46

Exostar is an example of a(n):

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

Question 47

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 48

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

A) Walmart.com
B) JCPenney.com
C) Dell.com
D) Staples.com

Question 49

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 50

The overall retail market in the United States in 2012 was estimated at about:

A) $37 trillion.
B) $3.7 trillion.
C) $370 billion.
D) $37 billion.

Question 51

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

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

Question 52

________ create and sell access to digital electronic markets.

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

Question 53

The element of a business model that is responsible for making the model work is:

A) the management team.
B) the organizational structure.
C) the firm's key competitive advantage.
D) the market strategy.

Question 54

Over the past decade:

A) the number of exchanges greatly increased.
B) the number of exchanges diminished sharply.
C) the number of exchanges stayed about the same.
D) exchanges have totally disappeared.

Question 55

Which of the following community providers is focused on financial advice, news, and opinions?

A) The Well (Well.com)
B) The Motley Fool (Fool.com)
C) RightStart
D) iVillage

Question 56

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 57

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

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

Question 58

One of the competitive advantages of a B2B service provider is that it can spread the cost of an expensive software system over many users, achieving efficiencies referred to as:

A) application efficiencies.
B) network efficiencies.
C) scale economies.
D) network externalities.

Question 59

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 60

Your startup firm has developed Web-based note-taking software that allows participants to create and share virtual notes attached to existing Web pages. You anticipate marketing your online application to Web development and design companies. Which of the following revenue models is the most appropriate for your new company?

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

Question 61

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 62

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

Question 63

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

Question 64

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 65

________ is a social network based on 140-character messages.

Question 66

Carbonite is a company that uses a(n) ________ business model.

Question 67

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 68

A ________ 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 69

A firm's ________ refers to the other companies operating in the same marketspace selling similar products.

Question 70

In the ________ revenue model, a Web site that offers users content or services charges a fee for access to some or all of its offerings.

Question 71

A(n) ________ is a company that collects information from a wide variety of sources and then adds value to that information.

Question 72

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

Question 73

Which of the following is not a primary activity in a firm value chain?

A) inbound logistics
B) finance/accounting
C) operations
D) sales and marketing

Question 74

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

Question 75

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

Question 76

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

Question 77

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 78

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 79

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 80

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