Question 1

Firms that can't generate cash quickly enough are referred to as having _____.
A) liquidity problems
B) sagging problems
C) high inventory turns
D) stock-outs
E) vertical integration problems

Accepted Answer

Firms that can't generate cash quickly enough are said to have liquidity problems, meaning they may struggle to meet short-term financial obligations.

Question 2

What advantage does Amazon get by creating its own branded products?
A) Allows the firm to cut out some of the costs that would otherwise go to a branded supplier.
B) Gives Amazon even more negotiating leverage with suppliers.
C) Allows Amazon products revealed on site and in the firm's product search results to eliminate costly advertising and other awareness-building spending that many rival products invest in.
D) Reduces reliance on well-known suppliers that otherwise sell commodity products.
E) All of the above

Accepted Answer

All of the given options are advantages that Amazon gets by creating its own branded products. By eliminating the costs that would otherwise go to a branded supplier, Amazon can set more competitive prices for its products, making them more attractive to customers. Having its own branded products also gives Amazon more negotiating leverage with suppliers, as they may feel threatened by the prospect of Amazon becoming a competitor. Additionally, Amazon can save costs on advertising by promoting its own products on its site and in search results. Finally, by reducing reliance on well-known suppliers, Amazon can differentiate itself from competitors who sell the same commodity products, creating a stronger brand identity.

Question 3

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 their products available on Amazon, the platform expands its product range and attracts more customers. This, in turn, strengthens network effects, as more customers attract more sellers, and more sellers attract more customers, creating a virtuous cycle. This competitive advantage bolsters Amazon's position as a dominant player in the e-commerce marketplace.

Question 4

Which of the following is true of Amazon?
A) Amazon's early warehousing was a model of efficiency and was critical to the firm being profitable from the start.
B) Amazon is the last place most consumers shop online.
C) The three pillars of Amazon's business are large selection, convenience, and lower prices.
D) Amazon, only recently has started selling directly to customers.
E) Amazon concentrates on niche customers, low brand assortment, and higher prices to gain competitive advantage.

Accepted Answer

The three pillars of Amazon's business are large selection, convenience, and lower prices. This is a well-known and frequently cited fact about Amazon, and sets it apart from traditional brick and mortar retailers. Options A, B, D, and E are all false statements.

Question 5

Allowing third-party sellers to list their products on Amazon is controversial. Why would Amazon allow products sold by others to appear on its site?
A) Selection attracts consumers.
B) A network effect competitive advantage is created where more buyers attract more sellers, giving Amazon an advantage over any rival attempting to create a similar marketplace.
C) Although products are sold by third parties, Amazon gains valuable data on things such as customer browsing habits and sales.
D) Amazon's brand is reinforced as a first-choice shopping destination.
E) All of the above.

Accepted Answer

All of the above statements are correct. Allowing third-party sellers to list their products on Amazon increases selection for consumers, creates a network effect competitive advantage, provides valuable customer data, and reinforces Amazon's brand as a first-choice shopping destination.

Question 6

Which of the following is considered one of the three 'pillars' critical to Amazon's business success?
A) Large selection
B) Niche customers
C) Inimitable technology
D) Dynamic pricing
E) Firm-owned brands

Accepted Answer

Large selection is considered one of the three pillars critical to Amazon's business success along with low prices and fast shipping. Amazon's focus on offering a vast selection of products has allowed them to appeal to a wide range of customers and differentiate themselves from competitors.

Question 7

Free shipping can cost Amazon upwards of . _____ million in a single quarter,
A) 16
B) 6
C) 60
D) 160
E) 600

Accepted Answer

The answer of Free shipping can cost Amazon upwards of...

Question 8

Which of the following is true of Amazon's warehousing process?
A) Autonomous robots are in charge of building an order from a warehouse's inventory without any human intervention.
B) Amazon's items that produce the most sales volume are stocked on shelves, alphabetically, to speed selection and packing.
C) Amazon's systems stamp names and addresses on boxes so they can be filled by pickers directly from shelves.
D) When stacking shelves in its warehouses, Amazon ensures that no two similar products sit next to each other.
E) Amazon's items that are heavily discounted and about to be written off as 'unsellable inventory' are dropped in an area called 'mass land' in one last-ditch effort to move under-performing warehouse stock.

Accepted Answer

The answer of Which of the following is true of...

Question 9

Money owed for products and services purchased on credit to be paid at a later date is known as _____.
A) accounts payable
B) net profit
C) pre-paid expense
D) gross profit
E) earnings before depreciation and tax

Accepted Answer

Accounts payable refers to money owed for products or services purchased on credit that needs to be paid at a later date. The other options are not related to this concept.

Question 10

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

Bezos has emphasized the importance of focusing on factors that are not going to change when building strategy.

Question 11

The Amazon Prime service provides consumers with unlimited two-day shipping and ultimately encourages more purchases from the site, and reinforces Amazon as a first-choice shopping destination for Prime members.

Accepted Answer

The statement accurately describes the benefits of the Amazon Prime service.

Question 12

Which of the following is not a data factor Amazon considers in delivering packages to customers?
A) Weather
B) Traffic
C) Employee job satisfaction
D) Fuel prices
E) Fleet availability

Accepted Answer

Amazon considers various data factors such as weather, traffic, fuel prices, fleet availability, and other relevant factors to optimize their delivery process. However, employee job satisfaction is not a direct data factor that Amazon considers for delivering packages to customers.

Question 13

Amazon's moves are largely motivated by:
A) customer focus.
B) cost cutting.
C) the focus on making immediate supplier payments.
D) internal leadership.
E) technology advancements.

Accepted Answer

Amazon has consistently emphasized customer focus as the driving force behind its decisions and strategies.

Question 14

Which of the following statements is true?
A) The concept of accounts payable is applicable only when a customer buys from a retailer.
B) The Amazon Associates program is the second largest affiliate marketing program in the world.
C) Amazon does not allow third-party sellers to sell products through its website.
D) Amazon has always sold products to customers using middlemen.
E) It is not uncommon for a big retailer like Amazon to be able to hold products for a month or longer without having to pay for them.

Accepted Answer

The statement about Amazon being able to hold products for a month or longer without having to pay for them is true, reflecting the concept of accounts payable where a company can receive goods or services from suppliers and pay for them at a later date. This is common in retail to manage cash flow efficiently.

Question 15

The firm's period between paying suppliers for products and collecting funds from customers who purchase these products is referred to as the _____.
A) earnings cycle
B) cash conversion cycle
C) inventory turnover cycle
D) liquidity period cycle
E) trade cycle

Accepted Answer

The firm's period between paying suppliers for products and collecting funds from customers who purchase these products is referred to as the cash conversion cycle. This cycle includes the time it takes to sell inventory and collect the funds from customers, minus the time it takes to pay suppliers for inventory. It is important to manage this cycle efficiently to ensure proper cash flow and liquidity for the company.

Question 16

Which of the following is the most liquid asset?
A) Plant machinery
B) Retail locations
C) Goodwill
D) Cash
E) Office furniture

Accepted Answer

The most liquid asset is cash, as it can be easily and quickly converted into other assets or used for transactions. Plant machinery, retail locations, goodwill, and office furniture are all examples of fixed assets that may take longer to sell or convert into cash.

Question 17

In order to achieve a negative cash conversion cycle a firm would want to:
A) increase its account payable period and its inventory turns.
B) decrease its account payable period and its inventory turns.
C) increase its account payable terms and decrease its inventory turns.
D) decrease its account payable terms and increase its inventory turns.
E) analyze systems and stop whatever processes are causing this, since a negative cash conversion cycle is associated with losses, not profits.

Accepted Answer

A negative cash conversion cycle indicates that a company is able to delay its payments long enough that it can sell its inventory and collect the receivables before it needs to pay its suppliers. Increasing the accounts payable period allows the company more time to pay its suppliers, and increasing inventory turns means the company sells its inventory faster. Both actions contribute to achieving a negative cash conversion cycle.

Question 18

The phrase inventory turns refers to:
A) the stock of inventory returned to a manufacturer due to poor quality.
B) also known as gross-profit margin turnover.
C) the number of times an inventory item moves within a warehouse.
D) the time it takes a product to be replaced by a newer model or upgraded product.
E) the number of times inventory is sold or used during a specific period.

Accepted Answer

Inventory turns refer to the number of times inventory is sold or used during a specific period. It is a measure of how quickly a company is replenishing its inventory and turning it into sales. A high inventory turnover ratio indicates that a company is efficiently managing its inventory and generating sales, while a low ratio may indicate that a company is facing inventory management issues or slow sales.

Question 19

Dynamic pricing:
A) refers to pricing that shifts over time based on conditions associated with product supply and demand.
B) refers to pricing that is always a notch higher than competition.
C) refers to pricing strategies that focuses on consistency even if environmental conditions fluctuate wildly.
D) is also known as the bargaining power of customers.
E) refers to pricing that is always a notch below competition.

Accepted Answer

Dynamic pricing refers to the strategy of adjusting prices in real-time based on changing market conditions such as supply and demand, competitor prices, and customer behavior. This allows businesses to optimize revenue by charging higher prices when demand is high and lower prices when demand is low.

Question 20

_____ is a randomized group of experiments used to collect data and compare performance among two options studied.
A) Bucket testing
B) Multivariate testing
C) A/B testing
D) Choice modelling
E) Web usability testing

Accepted Answer

A/B testing, also known as split testing, randomly divides a sample group into two groups and presents each group with a different version of the same content, such as a webpage or advertisement. By comparing the results from each group, it is possible to determine which option performs better. A/B testing is commonly used in marketing and web design to optimize conversions and user experience.

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

Firms that can't generate cash quickly enough are referred to as having _____.

What advantage does Amazon get by creating its own branded products?

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

Which of the following is true of Amazon?

Allowing third-party sellers to list their products on Amazon is controversial. Why would Amazon allow products sold by others to appear on its site?

Which of the following is considered one of the three 'pillars' critical to Amazon's business success?

Free shipping can cost Amazon upwards of . _____ million in a single quarter,

Which of the following is true of Amazon's warehousing process?

Money owed for products and services purchased on credit to be paid at a later date is known as _____.

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.

The Amazon Prime service provides consumers with unlimited two-day shipping and ultimately encourages more purchases from the site, and reinforces Amazon as a first-choice shopping destination for Prime members.

Which of the following is not a data factor Amazon considers in delivering packages to customers?

Amazon's moves are largely motivated by:

Which of the following statements is true?

The firm's period between paying suppliers for products and collecting funds from customers who purchase these products is referred to as the _____.

Which of the following is the most liquid asset?

In order to achieve a negative cash conversion cycle a firm would want to:

The phrase inventory turns refers to:

Dynamic pricing:

_____ is a randomized group of experiments used to collect data and compare performance among two options studied.