Deck 7: Amazoncom: an Empire Stretching From Cardboard Box to Kindle to Cloud

Question 1

Amazon does not open its website up to third-party sellers.

Answer 1

False

Question 2

Initially, Amazon adopted the domain of a non-profit organization.

Answer 2

False

Question 3

In order to automate profit-pushing hyper-efficiency, Amazon warehouses are powered by at least as much code as the firm's website.

Answer 3

True

Question 4

Which of the following is true of Amazon?

A) Amazon made profits from the first year of its operation.
B) It has limited its products to only electronic devices.
C) Its cloud computing business is one of the largest players in that category.
D) Its profitability has remained constant over the years and analysts continue to predict profits for the firm's future.
E) Amazon concentrates more on its quarterly results and is inflexible on details about its vision.

Question 5

In a set of steps called SLAM (scan, label, apply, manifest), and taking only about 2 minutes, packed boxes are weighed, and the software does an additional check to see if the weight is what's expected.

Question 6

Amazon went seven whole years without turning a profit.

Question 7

Accounts payable periods do not vary.

Question 8

Amazon became the fastest firm in history to reach $100 billion in sales.

Question 9

Amazon shelves are specifically stocked so that similar items are not placed next to each other.

Question 10

The three pillars of Amazon's business are large selection, convenience, and lower prices.

Question 11

Amazon owns the inventory that third-party sellers provide via the 'Fulfillment by Amazon' service.

Question 12

Many pundits assumed Amazon would fail. Why?

A) the firm was losing money and competing against established, well known, offline brands who were going online.
B) Amazon was too short-term focused.
C) the firm was based in Seattle, rather than Silicon Valley.
D) Amazon sales were not increasing.
E) all of the above.

Question 13

The use of Kiva robots has also allowed Amazon to radically reduce headcount, saving the firm additional money by cutting its workforce.

Question 14

One of the reasons Amazon has struggled to achieve profitability is because the firm has a negative cash conversion cycle.

Question 15

Amazon's success strategy is based on the focus on its quarterly results.

Question 16

Tech-fueled operations cannot yield greater profits than off-line players.

Question 17

Which of the following is not a firm that has received an investment from Jeff Bezos?

A) Uber
B) Twitter
C) BlueOrigin
D) The Washington Post
E) Bezos has invested in all of the above businesses.

Question 18

Amazon PrimeAir is the name of Jeff Bezos' commercial rocketry and aviation firm.

Question 19

Which of the following strategies was followed by Amazon's founder?

A) He focused more on Amazon's quarterly results.
B) He postponed profit harvesting.
C) He reduced warehousing capacity.
D) He consciously ignored cloud computing platforms.
E) He built e-commerce operations only for Amazon's customers in the United States.

Question 20

Amazon got its start selling games online.

Question 21

Firms that can't generate cash quickly enough are referred to as having _____.

A) liquidity problems
B) sagging problems
C) high inventory turns
D) stock-outs
E) vertical integration problems

Question 22

What advantage does Amazon get by creating its own branded products?

A) Allows the firm to cut out some of the costs that would otherwise go to a branded supplier.
B) Gives Amazon even more negotiating leverage with suppliers.
C) Allows Amazon products revealed on site and in the firm's product search results to eliminate costly advertising and other awareness-building spending that many rival products invest in.
D) Reduces reliance on well-known suppliers that otherwise sell commodity products.
E) All of the above

Question 23

By allowing third parties to make products available through Amazon, the firm strengthens network effects for competitive advantage.

Question 24

Which of the following is true of Amazon?

A) Amazon's early warehousing was a model of efficiency and was critical to the firm being profitable from the start.
B) Amazon is the last place most consumers shop online.
C) The three pillars of Amazon's business are large selection, convenience, and lower prices.
D) Amazon, only recently has started selling directly to customers.
E) Amazon concentrates on niche customers, low brand assortment, and higher prices to gain competitive advantage.

Question 25

Allowing third-party sellers to list their products on Amazon is controversial. Why would Amazon allow products sold by others to appear on its site?

A) Selection attracts consumers.
B) A network effect competitive advantage is created where more buyers attract more sellers, giving Amazon an advantage over any rival attempting to create a similar marketplace.
C) Although products are sold by third parties, Amazon gains valuable data on things such as customer browsing habits and sales.
D) Amazon's brand is reinforced as a first-choice shopping destination.
E) All of the above.

Question 26

Which of the following is considered one of the three 'pillars' critical to Amazon's business success?

A) Large selection
B) Niche customers
C) Inimitable technology
D) Dynamic pricing
E) Firm-owned brands

Question 27

Free shipping can cost Amazon upwards of . _____ million in a single quarter,

A) 16
B) 6
C) 60
D) 160
E) 600

Question 28

Which of the following is true of Amazon's warehousing process?

A) Autonomous robots are in charge of building an order from a warehouse's inventory without any human intervention.
B) Amazon's items that produce the most sales volume are stocked on shelves, alphabetically, to speed selection and packing.
C) Amazon's systems stamp names and addresses on boxes so they can be filled by pickers directly from shelves.
D) When stacking shelves in its warehouses, Amazon ensures that no two similar products sit next to each other.
E) Amazon's items that are heavily discounted and about to be written off as 'unsellable inventory' are dropped in an area called 'mass land' in one last-ditch effort to move under-performing warehouse stock.

Question 29

Money owed for products and services purchased on credit to be paid at a later date is known as _____.

A) accounts payable
B) net profit
C) pre-paid expense
D) gross profit
E) earnings before depreciation and tax

Question 30

While so many managers focus on what's changing in tech-fueled industries, Bezos feels that building strategy based on factors that are NOT going to change is critically important.

Question 31

The Amazon Prime service provides consumers with unlimited two-day shipping and ultimately encourages more purchases from the site, and reinforces Amazon as a first-choice shopping destination for Prime members.

Question 32

Which of the following is not a data factor Amazon considers in delivering packages to customers?

A) Weather
B) Traffic
C) Employee job satisfaction
D) Fuel prices
E) Fleet availability

Question 33

Amazon's moves are largely motivated by:

A) customer focus.
B) cost cutting.
C) the focus on making immediate supplier payments.
D) internal leadership.
E) technology advancements.

Question 34

Which of the following statements is true?

A) The concept of accounts payable is applicable only when a customer buys from a retailer.
B) The Amazon Associates program is the second largest affiliate marketing program in the world.
C) Amazon does not allow third-party sellers to sell products through its website.
D) Amazon has always sold products to customers using middlemen.
E) It is not uncommon for a big retailer like Amazon to be able to hold products for a month or longer without having to pay for them.

Question 35

The firm's period between paying suppliers for products and collecting funds from customers who purchase these products is referred to as the _____.

A) earnings cycle
B) cash conversion cycle
C) inventory turnover cycle
D) liquidity period cycle
E) trade cycle

Question 36

Which of the following is the most liquid asset?

A) Plant machinery
B) Retail locations
C) Goodwill
D) Cash
E) Office furniture

Question 37

In order to achieve a negative cash conversion cycle a firm would want to:

A) increase its account payable period and its inventory turns.
B) decrease its account payable period and its inventory turns.
C) increase its account payable terms and decrease its inventory turns.
D) decrease its account payable terms and increase its inventory turns.
E) analyze systems and stop whatever processes are causing this, since a negative cash conversion cycle is associated with losses, not profits.

Question 38

The phrase inventory turns refers to:

A) the stock of inventory returned to a manufacturer due to poor quality.
B) also known as gross-profit margin turnover.
C) the number of times an inventory item moves within a warehouse.
D) the time it takes a product to be replaced by a newer model or upgraded product.
E) the number of times inventory is sold or used during a specific period.

Question 39

Dynamic pricing:

A) refers to pricing that shifts over time based on conditions associated with product supply and demand.
B) refers to pricing that is always a notch higher than competition.
C) refers to pricing strategies that focuses on consistency even if environmental conditions fluctuate wildly.
D) is also known as the bargaining power of customers.
E) refers to pricing that is always a notch below competition.

Question 40

_____ is a randomized group of experiments used to collect data and compare performance among two options studied.

A) Bucket testing
B) Multivariate testing
C) A/B testing
D) Choice modelling
E) Web usability testing

Question 41

A(n) _____ is a marketing practice where a firm rewards partners (affiliates) who bring in new business, often with a percentage of any resulting sales.

Question 42

_____ is the number of times inventory is sold or used during a specific period.

Question 43

New Amazon Fresh "click and collect" centers in Seattle allow customers to order online and then drive through to have their groceries loaded directly into their cars at a predetermined time.

Question 44

A(n) _____ is a line of identifying text, assigned and retrieved by a given web server, and stored by your browser.

A) domain
B) session bean
C) header
D) cookie
E) URL

Question 45

Third-party products of Amazon are referred to as being part of the _____.

Question 46

What is the purpose of Amazon Dash?

A) To speed items throughout Amazon's warehouse.
B) To rapidly restock Amazon's fulfillment center shelves.
C) To speed delivery to consumers using drones.
D) To allow consumers to rapidly place orders with Amazon.
E) To deliver products using autonomous, driverless cars.

Question 47

The term __________________________________________________ refers to showing ads for products and services from a site that a user has previously visited.

Question 48

_____ is a classification of software that monitors trends among customers and uses this data to personalize an individual customer's experience.

Question 49

The Amazon/Pudue partnership is assumed to have lowered textbook costs by 14 percent.

Question 50

_____ problems are problems that arise when organizations cannot easily convert assets to cash.

Question 51

The phrase _____________________________ refers to a randomized group of experiments used to collect data and compare performance among two options studied.

Question 52

Amazon doesn't share spending habits of its Prime customers, but many estimates have Prime customers spending _____ as much as non-Prime.

Question 53

The online retailing technique known as _____ offers deep discounts of a limited quantity of inventory, often for a fixed period of time or until inventory runs out.

Question 54

How does Amazon gain bargaining power over its suppliers?

Question 55

Amazon's Kindle and Fire businesses are meant to create a channel for media sales as that segment rapidly shifts from atoms to bits.

Question 56

Describe the benefits Amazon has received by deploying Kiva robots in its fulfillment centers.

Question 57

The new Amazon Go concept store shows how a tech giant could really advance retail. The initial concept shows a store without cashiers and registers, where customers enter by __________.

A) user password
B) voice recognition
C) facial recognition
D) scanning an app
E) none of the above

Question 58

Roughly 300 Amazon pop-up stores, temporary kiosk-style spots in malls or other heavy-traffic retail spaces, have also appeared through Spring 2017.

Question 59

Despite the heavy investment by Amazon and others, the number of online grocery shoppers is still a measly____ percent in the US

A) 3.5
B) 13.5
C) 4.5
D) 14.5
E) 1.5

Question 60

Describe Amazon's customer obsession.

Question 61

If an author uses Amazon as a publisher, his titles will only be available through Kindle.

Question 62

Amazon, as a company, is susceptible to channel conflicts, but less so if it can deliver suppliers a greater revenue than all other channels combined.

Question 63

Briefly explain the success of the Kindle.

Question 64

The publishing practice known as _____________ pricing allows a retailer to buy products from suppliers, but then sell these products to consumers at whatever price they'd like.

Question 65

Amazon's digital publishing ambitions have extended beyond the printed word to include video content and video games.

Question 66

The phrase ___________________ refers to the situation where software developers start with a copy of a project's program source code, but modify it, creating a distinct and separate product from the original base.

Question 67

Amazon today sells fewer electronic books overall than their print counterparts.

Question 68

Amazon Echo refers to Amazon's audiobook division, an especially lucrative business because of the company's text-to-speech expertise.

Question 69

______________ refers to the industry practice where the publisher sets the price and the reseller gets a cut (usually around 30 percent in electronic book markets).

Question 70

U.S. Courts have ruled that it is illegal for Apple to charge app developers a 30 percent fee for digital products sold through apps.

Question 71

Identify the true statement.

A) Agency pricing is illegal.
B) Rivals colluding to set prices is illegal.
C) Wholesale pricing is illegal.
D) In agency pricing, the seller pays publishers for titles and then sells those titles at whatever price it wished.
E) Wholesale pricing is also known as agency pricing.

Question 72

Amazon will not have to worry about government antitrust concerns in eBook publishing since there are so many real-world bookstores, both chains and independents.

Question 73

Which of the following is an example of agency pricing?

A) A department store gets a cut on the selling price of a product, which is set by the product's manufacturer.
B) A retail store purchases merchandise from a manufacturer and sells the merchandise at whatever prices it wishes to charge.
C) The government of a country sets the minimum price for certain agricultural products to cover the costs incurred by the farmers.
D) A manufacturer and a retailer work in a collaborative manner to decide the price of the final product.
E) The government of a country sets the maximum price for a certain product that retailers cannot exceed.

Question 74

How has Amazon become a victim of channel conflict?

Question 75

_____ Law has allowed Amazon to radically drop the price of Kindle offerings.

Question 76

Amazon Fire Phone came with the following features:

A) One handed operation
B) 3-D perspective that shifted when the phone was tiled
C) Software that used the phone's camera to recognize various objects
D) Song and movie recognition
E) All of the above

Question 77

Which of the following is true of the Kindle?

A) An individual, who owns a Kindle, cannot purchase books provided by non-Amazon publishers.
B) The Kindle is only about digitally reading books and not about linking customers to other physical products offered by Amazon.
C) By the holiday season of the product's second year, the number of Kindles sold began to decline steadily.
D) Amazon doesn't look to make money directly from Kindle hardware sales.
E) Amazon today sells fewer electronic books overall than their print counterparts.

Question 78

Amazon has significantly changed the cost-structure of the publishing industry.

Question 79

_____ exists when a firm's potential partners see that firm as a threat.

Question 80

Amazon's Kindle is described as an e-reader, but these devices are also effectively storefronts, directly linking consumers to purchase opportunities for Amazon products..