Deck 2: E-Commerce Business Models and Concepts

Question 1

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

Answer 1

B

Question 2

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

Answer 2

False

Question 3

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

Answer 3

True

Question 4

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

Question 5

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

Question 6

________ 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

Question 7

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

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

Question 8

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 9

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

Question 10

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

Question 11

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

Question 12

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

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

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

Question 15

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

Question 16

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

Question 17

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 18

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

Question 19

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 20

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

Question 21

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

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

Question 22

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 23

Expedia is an example of a:

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

Question 24

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 25

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 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 companies utilizes a transaction fee revenue model?

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

Question 28

Which of the following is not a community provider?

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

Question 29

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 30

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

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

Question 31

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 32

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

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

Question 33

Which of the following statements about Groupon is not true?

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 34

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 35

Which of the following is not considered a portal?

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

Question 36

All of the following use an advertising revenue model except:

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

Question 37

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 38

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 39

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 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

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 42

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 43

________ create and sell access to digital electronic markets.

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

Question 44

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

Question 45

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

Question 46

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

A)Pandora
B)MailChimp
C)Evernote
D)Ning

Question 47

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 48

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 49

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 50

Which of the following was the first to announce a cloud music service?

A)Apple
B)Google
C)Amazon
D)Microsoft

Question 51

All of the following are assets of Twitter except:

A)user attention.
B)audience size.
C)database of tweets.
D)retail inventory.

Question 52

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

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

Question 53

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 54

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 55

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 56

Exostar is an example of a(n):

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

Question 57

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 58

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 59

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 60

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 61

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

Question 62

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

Question 63

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 64

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

Question 65

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

Question 66

Define value chain and explain the difference between a firm value chain, an industry value chain, and a value web.

Question 67

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

Question 68

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

Question 69

Define the term industry structure and discuss the ways the Internet and e-commerce have changed the five forces that characterize industry structure.

Question 70

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

Question 71

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

Question 72

Briefly explain three B2B Net marketplace business models besides the exchange business model.

Question 73

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 74

________ offer users powerful Web search tools as well as an integrated package of content and services, such as news, e-mail, instant messaging, calendars, shopping, and more, all in one place.

Question 75

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