Question 1

A perfect market is one in which:

Accepted Answer

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. A

Question 2

Discuss the implications of each of the unique features of e-commerce technology for the overall business environment.

Accepted Answer

The ubiquity of e-commerce creates new marketing channels and expands the size of the overall market. It also creates new efficiencies in industry operations and lowers the costs to firms of sales operations. By reducing the cost of information, the Internet provides each of the key players in the value chain for an industry with new opportunities to maximize their positions by lowering costs and/or raising prices. Manufacturers can develop direct relationships with their customers through their own Web sites and bypass the costs of distributors and retailers. Distributors can develop highly efficient inventory management systems to reduce their costs, and retailers can develop efficient customer relations management systems to strengthen their service to customers. Customers can use the Web to search for the best quality, prices, and delivery methods, thus reducing their transaction costs and the prices they pay for goods.
The global reach of e-commerce lowers barriers to entry and expands the market at the same time. This lowers the costs of both industry and firm operations through production and sales efficiencies. When the operational efficiency of an entire industry increases, it helps the industry to compete with alternative industries and lowers prices and adds value to consumers.
The universal standards of e-commerce lower barriers to entry while at the same time intensifying competition within an industry. Universal standards also reduce the costs for communications and computing, enabling firms to engage in broad-scope strategies. Communications efficiencies can also enable firms to outsource some primary and secondary activities to specialized, more efficient providers without affecting the consumer. The Internet can also be used to precisely coordinate the steps in the value chain for a firm, thus reducing overall costs.
The richness of e-commerce reduces the strength of powerful distribution channels. It also allows firms to reduce their reliance on traditional sales forces and can enhance post-sales support services.
The interactivity of e-commerce reduces the threat of substitutes through the enhanced use of customization. It also reduces industry and firm costs by enabling differentiation strategies. In their totality, the differentiation features of a product constitute the customer value proposition for a firm. The ability of the Web to personalize the shopping experience and to customize a product to the particular demands of each consumer are the most significant ways in which the interactivity of the Web can be used to differentiate products.
The use of Internet technology to personalize and customize a customer's experience or product reduces threats of substitutions, raises barriers to entry, reduces value chain costs by lessening reliance on sales forces, and enables personalized marketing strategies.
The information density on the Web weakens powerful sales channels, thus shifting bargaining power to the consumer, while also lowering the costs of obtaining, processing, and distributing information about suppliers and consumers.
The use of social technologies shifts programming and editorial decisions to consumers; creates substitute entertainment products; and energizes a large group of new suppliers.
E-commerce firms can also leverage the ubiquitous nature, the global reach, the interactivity, and the information density of the Web to differentiate products and services. Firms can make it possible for consumers to purchase a product from home, work, or on the road, anywhere in the world. They can create Web-based experiences with unique interactive content and store and process product information, warranties, and helpful hints to differentiate their product and their firm from the competition.

Question 3

All of the following use an advertising revenue model except:

Accepted Answer

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

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)   Walmart
B)   Sears
C)   Bluefly
D)   Staples

Question 6

________ create and sell access to digital markets.

Accepted Answer

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

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Which of the following may offer its customers value chain management software?

Accepted Answer

A)   e-distributors
B)   e-procurement companies
C)   exchanges
D)   community providers

Question 9

Over the past decade, the number of exchanges has:

Accepted Answer

A)   greatly increased.
B)   diminished sharply.
C)   stayed about the same.
D)   increased slowly but steadily.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

All of the following may lead to a competitive advantage except:

Accepted Answer

A)   less expensive suppliers.
B)   better employees.
C)   fewer products.
D)   superior products.

Question 12

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

A) True 
 B)False

Question 13

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

Accepted Answer

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

Question 14

Which of the following gives a business model the most credibility with outside investors?

Accepted Answer

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 15

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

Accepted Answer

The answer of A(n) ________ is a company that sells...

Question 16

Innovative entrepreneurs and their business firms that destroy existing business models are referred to as ________.

Accepted Answer

The answer of Innovative entrepreneurs and their business firms that...

Question 17

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.

Accepted Answer

A)   value chain
B)   value system
C)   value web
D)   business strategy

Question 18

The overall retail market in the United States in 2017 was estimated at about:

Accepted Answer

A)   $47 trillion.
B)   $4.7 trillion.
C)   $490 billion.
D)   $47 billion.

Question 19

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?

Accepted Answer

A)   global reach
B)   richness
C)   interactivity
D)   personalization

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 2: E-Commerce Business Models and Concepts

A perfect market is one in which:

Discuss the implications of each of the unique features of e-commerce technology for the overall business environment.

All of the following use an advertising revenue model except:

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

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

________ create and sell access to digital markets.

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

Which of the following may offer its customers value chain management software?

Over the past decade, the number of exchanges has:

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

All of the following may lead to a competitive advantage except:

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.

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

Which of the following gives a business model the most credibility with outside investors?

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

Innovative entrepreneurs and their business firms that destroy existing business models are referred to as ________.

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.

The overall retail market in the United States in 2017 was estimated at about:

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?

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