Question 1

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

Accepted Answer

Tech-fueled operations can lead to greater efficiency, cost savings, and access to wider markets, which can ultimately result in higher profits than off-line players.

Question 2

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

Accepted Answer

By allowing third parties to make products available through Amazon, the platform offers a wider range of products to customers. This leads to more customers choosing to use Amazon for their online shopping needs, which in turn attracts more third-party sellers to the platform. This virtuous circle strengthens network effects for Amazon, giving the firm a competitive advantage.

Question 3

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

Accepted Answer

Third-party sellers own the inventory they provide via the 'Fulfillment by Amazon' service. Amazon only stores and handles the inventory for them.

Question 4

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

Accepted Answer

The answer of Amazon shelves are specifically stocked so that...

Question 5

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

Accepted Answer

Amazon actually benefits from a negative cash conversion cycle, which means it sells products and collects payments from customers before it has to pay its suppliers, improving its cash flow and contributing to its financial success.

Question 6

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

Accepted Answer

Amazon initially registered under the domain "amazon.com" as a commercial entity, not under a non-profit domain.

Question 7

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

Accepted Answer

Amazon does open its website to third-party sellers, who are able to sell their products through the Amazon Marketplace.

Question 8

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

Accepted Answer

This is a commonly cited statement about Amazon's business model.

Question 9

Amazon got its start selling games online.

Accepted Answer

Amazon initially started as an online bookstore before expanding into a wide variety of products and services.

Question 10

Accounts payable periods do not vary.

Accepted Answer

Accounts payable periods can vary depending on the terms negotiated with individual vendors or suppliers. Some may require payment within 30 days, while others may offer a longer period such as 60 or 90 days.

Question 11

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

Accepted Answer

Amazon PrimeAir is the name of Amazon's drone delivery service, not Jeff Bezos' rocketry and aviation firm. The name of Bezos' firm is Blue Origin.

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.

Accepted Answer

Amazon was losing money and competing against established, well-known offline brands who were already going online. This made many pundits assume that Amazon would fail.

Question 13

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.

Accepted Answer

This statement accurately summarizes Bezos' philosophy on strategy and long-term planning.

Question 14

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

Accepted Answer

Amazon's warehouses heavily rely on automation technology and algorithms to ensure fast and efficient processing of orders. This automation technology involves significant amounts of code to operate.

Question 15

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.

Accepted Answer

The answer of Which of the following is not a...

Question 16

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

Accepted Answer

While Kiva robots (now Amazon Robotics) have automated some tasks in Amazon's warehouses, leading to increased efficiency and productivity, Amazon has continued to grow its workforce significantly over the years, indicating that the use of robots has not led to a radical reduction in headcount.

Question 17

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.

Accepted Answer

Amazon's cloud computing business, Amazon Web Services (AWS), is one of the largest players in the category of cloud computing. The other options are incorrect: A is false because Amazon did not make a profit in its early years and only became profitable in 2001; B is false because Amazon sells a wide range of products beyond electronic devices; D is false because Amazon's profitability has not remained constant and the company has had some periods of significant losses; and E is false because Amazon is actually known for being focused on its long-term vision and growth rather than short-term quarterly results.

Question 18

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.

Accepted Answer

Amazon's founder, Jeff Bezos, postponed profit harvesting in his early years of running the company. Instead, he reinvested profits into expanding the business, creating new products and services, and improving customer experience. This strategy allowed Amazon to dominate e-commerce and become one of the most successful companies in the world.

Question 19

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

Accepted Answer

Amazon's success strategy is based on customer obsession, continuous innovation, and long-term thinking, not just on quarterly results.

Question 20

Amazon went seven whole years without turning a profit.

Accepted Answer

This is true. Amazon did not turn a profit until 2003, seven years after it was founded in 1996.

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