Deck 8: Building Business Models

Question 1

What in the business model will contribute to competitive advantage?

A)the infrastructure
B)the offering
C)financial viability
D)all of these

Answer 1

D

Question 2

What was the likely reason that VF changed the way it received money for its services?

A)They lacked ideas for manufacturing.
B)Business startups did not have up-front cash.
C)It was ultimately more lucrative.
D)There was little risk in the investment.

Answer 2

B

Question 3

What makes the company in the case study, VF, scalable?

A)a large number of engineers in Pakistan who can work on projects and large international market
B)the profitability of the service
C)a good, repeatable idea
D)differentiation in manufacturing and large, defined market

Answer 3

D

Question 4

What will the business model define as a way of creating value?

A)how unmet needs will be met in an existing market
B)how profits will be made
C)how the stock will be valued
D)how customers will be differentiated

Question 5

A ______ is a formal document that provides, among other things, background and financial information about the company.

A)business model
B)business plan
C)business strategy
D)investor plan

Question 6

Business models help entrepreneurs generate ______ and ______.

A)value; scale
B)hypotheses; tests
C)income; markets
D)ideas; partners

Question 7

What is meant by scalable?

A)The business can function as it grows.
B)The business can hold its weight.
C)The business can be franchised.
D)The business can be scaled back.

Question 8

What are the four parts of a business model?

A)target customers, employees, founders, investors
B)financing, infrastructure, employees, customers
C)customers, the offering, the infrastructure, financial viability
D)financing, customers, product, service

Question 9

In the case study, VF offers which of the following as a value?

A)finding the expertise to build a testable product quickly
B)an engineering service
C)a service in Pakistan
D)business planning support

Question 10

What does the business model define in terms of the business's service or product?

A)durability
B)quality
C)differentiation
D)viability

Question 11

What would be the best definition of a business model?

A)a small pilot of the business as it will be practiced
B)a series of hypotheses that suggest business practices
C)a plan for expansion
D)a framework that describes how a company creates, delivers, and extracts value

Question 12

The offering addresses ______.

A)the target customers, the resources, and how the product or service will help the customer
B)what will be given to investors in return for capital
C)the product or service
D)none of these

Question 13

What is the relationship between the business plan and the business model?

A)The business model will not be possible without a business plan.
B)The business model will support the business plan, explaining how to attain the plan's goals.
C)They are the same thing.
D)A business plan supports the business model, explaining how to attain the model's goals.

Question 14

Why was Steve Blank quoted as saying, "A startup is a temporary organization in search of a scalable business model"?

A)Most companies do not have a business model.
B)People often make mistakes and need to start over again.
C)A business model can be adjusted to meet new information.
D)Most business models are not scalable.

Question 15

What in the business model will contribute to competitive advantage?

A)the infrastructure
B)the competitors
C)the entrepreneur's personal story
D)the business plan

Question 16

A business model helps entrepreneurs general value and ______.

A)profits
B)scale
C)markets
D)customer

Question 17

While startups can be flexible in their model, what should be the caution for existing models?

A)Do not change after you have a workable model.
B)Be sure you have your model solidified before the company grows.
C)Any company should be ready for adjustments and changes as markets change.
D)A business model should be changed at least once a year.

Question 18

What unique market does the company in the case study, VF, serve?

A)entrepreneurs who need testable products
B)small manufacturers
C)people who need small batches of engineering product
D)small business startups

Question 19

In addition to financing, why would it make sense for VF to own equity in their clients' company?

A)They are partnering manufacturers of the company's product.
B)They would earn more in the long run.
C)It involves less risk than direct payment.
D)They lie to help emerging companies.

Question 20

Which of the following is a way that a business model will describe value?

A)by explaining how revenue will be obtained
B)by explaining how profits will be made
C)by explaining how the company will serve customers in new markets
D)by describing the elements of the financial forecast

Question 21

A CVP requires that you think about your business from the perspective of what group?

A)the employees
B)the investors
C)the customers
D)the operations team

Question 22

Which of the following is necessary for an effective CVP?

A)It must be lower in cost than that offered by competitors.
B)It must offer a giveaway or something extra.
C)It must be measureable in monetary terms.
D)It must offer occasional discounts and rewards.

Question 23

Within a business model, which of the following describes what is meant by a "customer"?

A)anyone who has purchased your product
B)people who have purchased or intend to purchase your product
C)the segments of the market your offering intends to serve
D)anyone in the geographic reach of the business

Question 24

Which of the following would be included when describing the infrastructure?

A)financial viability
B)customers
C)facilities
D)the offering

Question 25

Why would Rocket Internet raise questions of ethics?

A)They are taking someone else's business model and placing it elsewhere.
B)They are producing the same service at a lower cost.
C)They are offering the service to an underserved market.
D)They are selling their companies back to the company they are cloning.

Question 26

Which of the following allowed Tata cars to be successful?

A)They removed the number one problem that people had in owning a car-cost.
B)They built a smaller car.
C)innovative technology
D)low-cost relationship with vendors

Question 27

Which of the following would be included when describing the infrastructure?

A)people
B)technology
C)facilities
D)all of these

Question 28

How is the section on financial viability more than a financial model?

A)It carries less detail.
B)It carries more detail.
C)It explains why customers give you money.
D)It explains the size of the market.

Question 29

In determining the right price within the CVP, it is important to consider which of the following?

A)how much the customer can afford to pay
B)how much customers are willing to pay for the value received
C)the cost of producing the product or service
D)the cost of competitive products

Question 30

What elements of car design did Tata change in order to produce their CVP?

A)product design
B)manufacturing process
C)service model
D)all of these

Question 31

The offering is also referred to as which of the following terms?

A)the investment
B)the customer value proposition
C)the product or service
D)the return on investment

Question 32

What problem did FedEx solve for customers in its CVP?

A)the lack of easy, door-to-door, overnight delivery of packages
B)the lack of customer signatures of received goods
C)the lack of alternatives to the USPS
D)the lack of prepackaged envelopes

Question 33

Which of the following is necessary for an effective customer value proposition (CVP)?

A)It must be offered to a different group of customers than that addressed by competitors.
B)It must offer better value than the competitors.
C)The product must be lower in cost than the competitors.
D)It must be offered to a very narrow group within the general market.

Question 34

In the case example of Rocket Internet, how did the business model differ from the companies they copied?

A)They were clones, and thus the model was exactly the same.
B)They addressed a different market segment within the global market.
C)They offer improved products.
D)They give the clone companies more time to succeed.

Question 35

To develop a good CVP, products must not only fulfill a need but ______.

A)appeal to the high-tech needs of customers
B)fit into customers' lifestyles
C)fill a large market
D)appeal to customers who can afford the product

Question 36

What problem did IKEA solve for customers in its CVP?

A)Current low-cost furnishings were unattractive or secondhand.
B)Customers wanted do-it-yourself furniture.
C)Customers were looking for sleek European designs.
D)Customers wanted furniture that coordinated.

Question 37

What is required to have a deep understanding of what the customer wants?

A)a clear understanding of what the customer is currently using
B)a clear marketing plan that will inform the customers of the superiority of your product
C)understanding the customers' goals
D)understanding the competition

Question 38

Which of the following is necessary for an effective CVP?

A)It must be lower in cost than that offered by competitors.
B)It must have the ability to perform over a considerable length of time.
C)It must delivered with greater speed than the competitors.
D)It must be delivered with better technology than the competitors.

Question 39

The revenue and the cost structures would be included in which part of the business model?

A)revenue structures
B)cost structures
C)financial viability
D)financial statement

Question 40

Which of the following would be described when describing the infrastructure?

A)product
B)suppliers
C)technology
D)all of these

Question 41

Food Flight offers unique food options that are flown in from key cities.Customer can order smoked salmon from Alaska, shrimp creole from Louisiana, and Texas ribs from Dallas.What problem does Food Flight address?

A)lack of skill
B)lack of money
C)lack of access
D)lack of time

Question 42

Andrew owns a popular, but expensive Chinese restaurant.In order to introduce more people to his brand, he offers a series of one-time "taste fairs" in which he brings his recipes to a locally sponsored event.Customers are able to pay modest amounts for small servings of his creations while not paying for the ambiance of the famous restaurant.What need is Andrew addressing?

A)the restaurant's lack of customers
B)customers' lack of money
C)customers' lack of time
D)the customers' lack of access

Question 43

Which of the following defines the term mass market?

A)a generic group outside the target market
B)a large crowd of nondiscriminating consumers
C)a large group of customers with similar needs or problems
D)a global market

Question 44

Alice picks up a package of security software and reviews the back cover.On it, it lists various features and compares the software's performance against its competitors, relative to those features.The result is a matrix of xs and the software has more xs than its competitors.This approach to CVP demonstrates which of the following?

A)all-benefits approach
B)points-of-difference approach
C)point-summary approach
D)competitive assessment approach

Question 45

Which of the following is considered the "gold standard" of a CVP?

A)all-benefits approach
B)points-of-difference approach
C)resonating-focus approach
D)low-cost advantage

Question 46

What major customer problem did MinuteClinic solve in their CVP?

A)lack of time
B)lack of access
C)lack of skill
D)lack of money

Question 47

The Perfect Grind offers drive-through coffee and snacks to commuters coming to and from work.They also cater to college students who attend a community college a block away.What would describe the Perfect Grinds' target customer?

A)mass market
B)multisided market
C)diversified market
D)niche market

Question 48

Customers like to create handmade gifts for friends and family.Pat's store offers pre-formed ceramic products that can be easily colored in and painted.Pat then fires the ceramic pieces for a lifetime keepsake.What need is Pat addressing in her CVP?

A)a lack of time
B)a lack of skill
C)a lack of gift ideas
D)a lack of money

Question 49

What is the key feature of the resonating-focus approach to CVP?

A)It focuses on why people like your product.
B)It describes all of the features of the product relative to competitors.
C)It tells customers why they should buy your product.
D)It describes all the positive features of your product.

Question 50

A ______ market is a small market segment comprised of customers with specific needs and requirements.

A)micro market
B)niche market
C)boutique market
D)target market

Question 51

This market describes two or more customer segments that are linked mutually but independent of each other.

A)mass market
B)diversified market
C)matching markets
D)multisided markets

Question 52

What are the four major categories of problems experienced by customers?

A)lack of time, money, skill, access
B)lack of money, lack of contacts, lack of interest, lack of time
C)lack of skill, lack of social experience, lack of support, lack of money
D)lack of access, lack of support, lack of money, lack of friends

Question 53

Breaking up your customer segments into groups of common needs and problems would create which of the following markets?

A)segmented market
B)market niche
C)mass market
D)diversified market

Question 54

Which of the following offers a variety of products to two or more customer segments with different needs, even if the resulting markets are unrelated to one another?

A)segmented market
B)market niche
C)mass market
D)diversified market

Question 55

Which of the following might be considered when determining your target market?

A)age
B)capacity for risk
C)Are they a trendsetter ?
D)all of these

Question 56

Which of the following might have a multisided market segment?

A)an educational software company who markets action gameware that teaches geography and science
B)a coffee shop
C)a shopping service for busy professionals and shut-ins
D)a car repair agency

Question 57

Christine has obtained a job pitching a product at a local state fair.Her job is to demonstrate cookware, highlighting its features and demonstrating its use as she prepares food for visitors who can stop, watch her cook, and get samples.The cookware will be offered at a sizeable discount.Christine will be selling the cookware based on which of the following CVPs?

A)hard-sell approach
B)points of difference approach
C)all-benefits approach
D)customer engagement approach

Question 58

Which approach to CVP involves listing all the benefits of your product or service without comparing it to others?

A)the list approach
B)the all-benefits approach
C)the pro and con listing
D)the pitch approach

Question 59

Gift Prescriptions is a company that offers small gifts that can be left behind in doctors' offices as an appreciation for time spent reviewing company products.Gift Prescriptions sells their gifts to pharmaceutical companies, therapists, and medical supply stores.Gift Prescriptions' market segment would be described as ______.

A)a mass market
B)a niche market
C)a segmented market
D)a diversified market

Question 60

Which of the following might be considered when determining your target market?

A)age
B)gender
C)profession
D)all of these

Question 61

McCafe offered new products that were not part of traditional offerings.Sofa-type seating encourage a relaxing mood for people who wanted to sit and chat.By appealing to a nontraditional market (i.e., not families with children) what approach was McDonald's taking?

A)mass market
B)diversification
C)niche market
D)modernization

Question 62

Danielle will be offering a free service on the first Tuesday of every month during which she will offer free tool sharpening.She assumes that this will be a need of customers who visit her garden and landscaping store and they will help spread the word about her location and services.Which of the following BMC elements is Danielle addressing?

A)value proposition
B)customer relationships
C)market segmentation
D)customer loyalty plans

Question 63

General Motors advertised an "automobile for all ages." By this, what market was General Motors addressing?

A)a target market
B)a niche market
C)a mass market
D)a diversified market

Question 64

Which of the following is most likely to have a diversified market?

A)Home Depot
B)The Dollar Tree
C)Petco
D)Babies R Us

Question 65

Under the business model canvas (BMC), what is covered under the offering?

A)the value proposition and customer segments
B)customer segments
C)the value proposition
D)customer segments and channels

Question 66

Jerry has listed that his business appeals to people 50 years and above who are restructuring their finances for retirement plans.What has Jerry defined?

A)a niche market
B)a market segment
C)a mass market
D)a diversified market

Question 67

In her landscape and garden supply shop, Danielle will be offering plant supplies, garden designs, statuary, landscaping services, and yard maintenance plans.What element of the BMC is Danielle addressing?

A)market segmentation
B)revenue streams
C)services
D)customer relationships

Question 68

Business models must be changed whenever a company launches a new product or service.

Question 69

Under the business model canvas (BMC), what components are related to financial viability?

A)revenue streams and market size
B)cost structure and revenue streams
C)investment funds and revenue streams
D)revenue streams and growth projections

Question 70

Perfect Grind is a coffee shop near Seattle, Washington.What might be considered one of its key activities?

A)purchasing a coffee steamer
B)stock management
C)customer relationships
D)determining resources for expansion

Question 71

In Southwest's BMC, the company decided to fly only one type of aircraft.What element of the BMC did this address and what was the effect?

A)resources, and it affected the key activities required to repair and maintain the aircraft
B)resources, and affected customers
C)key activities and resulted in reduced customer relationships
D)key activities and resulted in the value proposition

Question 72

Under the business model canvas (BMC), what components are related to customers?

A)customer segments, channels, and customer relationships
B)customer segments and value proposition
C)customer segments and key activities
D)customer segments and channels only

Question 73

In a peer-to-peer business model, ______.

A)businesses sell products that are unique to a limited number of peer customers
B)products and services are better than traditional services
C)distribution occurs in a different way from traditional services
D)interactions are business to business

Question 74

Under the business model canvas (BMC), what components are related to infrastructure? 

A)organizational design, facilities, key resources
B)key assets, key resources, organization
C)key activities, key resources, key partners
D)computers, organization design, facilities

Question 75

What do Uber and Airbnb have in common in the BMC?

A)They advertise on the Internet.
B)Customers can make direct transactions with the service provider.
C)They provide a unique service.
D)They follow traditional service guidelines.

Question 76

Which of the following BMC element refers to building positive feelings about your business and customer loyalty?

A)value proposition
B)customer relationships
C)market segmentation
D)customer loyalty plans

Question 77

In creating your own BMC, what side of the canvas should you focus on first?

A)the value delivery side
B)the value creation side
C)start anywhere
D)start with your product description

Question 78

An Internet-based company lists comments from customers that include how the product was used and adapted to fill their needs.This is an example of ______.

A)a resonating focus
B)customer satisfaction
C)direct marketing
D)intervening marketing

Question 79

The answer to the question, "What are the different ways I can reach my customer?" will result in what element of the BMC?

A)market segment
B)channels
C)value proposition
D)customer segment

Question 80

What need inspired Meridith Perry, founder and CEO of uBeam?

A)the inconvenience of using a power cord to charge her laptop and smartphone
B)a need to apply her knowledge about soundwaves
C)She was asked to develop a different source of energy for a leading computer company.
D)She felt that if she built a new way of powering devices, she could fund her startup.