Deck 2: Internet Business Models and Strategies

Question 1

Which of the following statements most clearly defines the relationship between business models and business strategy?

A) the various models are all mutually exclusive of one another
B) the specific model or combination of models that a business uses helps to define its internet or ebusiness strategy
C) models provide a menu for a business strategist to consider when addressing questions that will directly impact the particular business
D) business models and business strategy are closely linked to each other
E) none of the above

Answer 1

the specific model or combination of models that a business uses helps to define its internet or ebusiness strategy

Question 2

Which of the following are major activities normally included in ebusiness planning?

A) developing a business model
B) installing application architecture
C) creating a mission
D) designing technology architecture
E) defining a tactical plan

Answer 2

defining a tactical plan

Question 3

RoboShopper is an example of which of the following?

A) reverse auction
B) search agent
C) classified
D) bounty broker
E) auction broker

Answer 3

search agent

Question 4

Which of the following reflects the characteristics of a community model?

A) depends on user loyalty and community identification for its viability
B) can present an opportunity for businesses to advertise and to provide a convenient access point to their own site
C) sites are usually built with volunteer labour and feature a variety of content from the community
D) it is often difficult for community sites to remain current
E) all of the above

Question 5

There are a large number of brokerage sites that make money by charging a fee for transactions they enable on their site. Which of the following is a type of brokerage site?

A) buyer aggregators
B) market makers
C) buy/sell fulfillment sites
D) booksellers
E) none of the above

Question 6

An affiliate model can be described by which of the following statements?

A) a good example of this model is a banner and ad exchange
B) www.amazon.com is an example of this model
C) affiliate programs can be joined through affiliate manager sites
D) affiliate manager sites can offer a point of contact for all those interested in exchanging banners.
E) all of the above

Question 7

The development of a strategic plan for an ebusiness strategy should:

A) be outsourced.
B) not be done because documenting strategy is a waste of time.
C) be done after the website is designed.
D) establish online objectives which align with offline.
E) be based upon existing offline business knowledge.

Question 8

An ebusiness model is:

A) a flow chart that shows how products are delivered.
B) a method by which a bricks company converts to a clicks company.
C) an information technology process for ecommerce efficiency.
D) a means by which an ebusiness can earn a profit.
E) an advertising mechanism for online sales.

Question 9

Priceline.com is an example of which of the following types of brokerage sites?

A) buy/sell fulfillment site
B) market exchange
C) reverse auction
D) auction broker
E) search agent

Question 10

The _______ model is a wholesaler or retailer of goods and services.

A) manufacturer
B) affiliate
C) merchant
D) community
E) subscription

Question 11

It is important for long-standing enterprises that wish to embrace ebusiness to:

A) go all out and design a great website.
B) sell different products online to avoid cannibalism.
C) hire a number of internet experts to launch the strategy.
D) evaluate the corporate strategy and ebusiness strategy prior to proceeding.
E) all of the above

Question 12

Which of the following statements is true in regards to an infomediary?

A) data collected from users are sold to companies who are charged a fee for having their ebusiness activity monitored
B) sites that build on the economic value of information about people's purchasing habits
C) may offer free internet access
D) asks the users to fill out information about themselves and their buying habits
E) all of the above

Question 13

ChemConnect is a good example of which of the following?

A) distributor
B) buy/sell fulfillment site
C) buyer aggregator
D) business trading community
E) market exchange

Question 14

Advertising is a major area of online revenues and expenses for many companies. Which of the following are issues of concern for advertising?

A) paying for banner ads can be a waste of money
B) affiliate programs only work for certain products
C) click through counts are not necessarily good payment systems
D) email campaigns can have negative effects on image
E) all of the above

Question 15

Which of the following statements holds true about the "direct sales by manufacturer" model?

A) no matter who the manufacturer sells to, there are no variations of this model
B) is the use of the web by product manufacturers to sell their products directly to customers
C) this model does not result in channel conflict
D) the manufacturer cannot compete through reintermediation
E) all of the above

Question 16

If a business sells over the web and also has a bricks-and-mortar presence it is referred to as what type of operation?

A) retailer
B) pure-play
C) bricks-and-clicks
D) real-click
E) none of the above

Question 17

Which of the following would be appropriate when defining a business model?

A) the manner in which a business organizes itself so as to achieve its objectives
B) traditional business models have usually revolved around a number of products and/or services so as not to limit the business
C) the accounting standards which are used
D) a business model typically refers to the traditional "push system" of conducting business
E) all of the above

Question 18

In the affiliate model for online business:

A) companies share profits equally amongst all affiliates.
B) websites lend credibility to each other through PR but share no revenues.
C) no advertising costs are paid unless a customer buys a product.
D) the customer pays a fee directly to the affiliate business.
E) none of the above

Question 19

A brokerage business model earns profits through:

A) advertising revenue.
B) selling low cost goods at high markups.
C) charging a commission on each transaction.
D) getting reimbursed for a portion of its overhead costs by members.
E) working exclusively for large distributors.

Question 20

Which of the following is one of the ebusiness models defined in the literature?

A) distributor
B) franchise
C) infomediary
D) direct advertiser
E) all of the above

Question 21

An internet business model involves the use of the internet as a ________ tool for generating profits and achieving other business objectives.

A) strategic
B) business
C) support
D) operational
E) new

Question 22

Michael E. Porter cautions against a strategy based on price competition. Instead, Porter recommends competing on quality, features, and ________.

A) cost
B) brand
C) profit
D) service
E) value

Question 23

Clickthrough counts do not necessarily result in an accurate count of individual users who use an online banner advertisement because:

A) privacy laws prevent advertisers from tracking users under age 16.
B) users can change the settings on their computer to prevent tracking.
C) software on the website cannot delineate between individual users.
D) there is no reliable way to tabulate clicks on web advertisements.
E) a single user could click on a particular banner ad several times.

Question 24

Which model represents a higher proportion of ebusiness activity conducted in the economy than B2C models?

A) B2E
B) B2B
C) C2G
D) B2G
E) C2C

Question 25

Strategic management process is the process by which resources are acquired, developed, and allocated to the core business activities.

Question 26

The following are examples of ebusiness revenue models:

A) licensing models, brokerage models, and utility models
B) bricks models, clicks models, and pure-play models
C) B2B models, B2C models, and B2G models
D) virtual malls, auction brokers, and metamediaries
E) search agents, classifieds, and market exchanges

Question 27

Ebusiness planning must be done in conjunction with an entity's IT strategy but not necessarily with its corporate strategy.

Question 28

Despite analysts' predictions that customers will use websites primarily to research their purchases but will continue to make their purchases in physical stores, statistics on online shopping behaviour contradict this view and instead show a continuing expansion of ecommerce activity.

Question 29

Intermediaries that gather and coordinate the products and services offered by other intermediaries that specialize in specific areas are called ________.

A) metamediaries
B) search agents
C) transaction brokers
D) auction brokers
E) intelligent software agents

Question 30

Workopolis.com is an example of what kind of brokerage model?

A) buy/sell fulfillment sites
B) search agents
C) reverse auctions
D) metamediaries
E) classifieds

Question 31

The advertising model can remain viable, even when there is a moderate volume of traffic on the site.

Question 32

Business models that are solely or predominantly based on the internet are also called "pure plays."

Question 33

A market exchange provides a vehicle for suppliers to connect with customers.

Question 34

One business can be involved in B2C, B2B, and B2E at the same time.

Question 35

Web storefronts in the continuum of internet business models represent one step up from what model?

A) clicks
B) internet-based sales channels
C) bricks
D) merchant
E) affiliate

Question 36

Travel reservations (using Expedia) is an example of a C2C model.

Question 37

Traditional business models have usually revolved around a central product or service.

Question 38

Which model has business dealings that often involve long term arrangements that are documented in legal contracts?

A) B2E
B) C2G
C) B2B
D) B2G
E) C2C

Question 39

The utility model is a user-pay site, offering specific services for a fee.

Question 40

What label is used to distinguish the degree to which core business processes depend on the internet?

A) net versus wire
B) bricks versus networks
C) bricks versus clicks
D) wireless versus posts
E) networks versus hotspots

Question 41

In a pure-play situation, where the only business is ebusiness, the corporate strategic plan will be the same as the business plan.

Question 42

Name 3 terms used to describe an etailer that also has a traditional brick-and-mortar presence.

Question 43

Give 3 examples of government to consumer (G2C) ebusiness activities.

Question 44

List the 5 elements of the Porter Five Forces analysis.

Question 45

Why are brokers often referred to as market makers?

Question 46

Name any 3 key elements of an internet business model and describe them.

Question 47

PayPal is a popular third-party transaction broker that operates on the internet to facilitate settlements for purchases. Explain how PayPal works.

Question 48

An approach to industry analysis that is widely used is the Porter Five Forces analysis.

Question 49

Describe 3 ways in which business-to-employee (B2E) internet models support the ebusiness activities of an organization.

Question 50

What does the term "SWOT" stand for and where is it used?