Deck 5: Building Business Models

Question 1

Given that startups can be flexible in their business model,what general guide should they follow?

A)Existing models should not be changed.
B)Existing models should be replaced frequently.
C)Existing models should be prepared to adjust as markets change.
D)Existing models require annual updating.

Answer 1

C

Question 2

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

A)It must not have any direct competition.
B)It must offer better value than the competition.
C)It must cost less than the competition.
D)It must offer the exact same value as the competition.

Answer 2

B

Question 3

Fulfilling unmet customer needs using an existing product or service is called ______.

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

Answer 3

C

Question 4

The practice of hypothesizing,testing,and validating to create a business model is called ______.

A)scientific entrepreneurship
B)evidence-based entrepreneurship
C)business planning
D)customer value planning

Question 5

It is typically easier for new businesses to change their business model because new businesses ______.

A)have the capital to fund such changes
B)have not yet formulated a business plan
C)have no competitors
D)tend to be smaller and more agile

Question 6

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)A business plan is more of an exercise while a business model is a formal structure.
C)Business plan is another term for business model.
D)A business model is a journey to gather evidence while a business plan is a formal document.

Question 7

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

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

Question 8

The offering includes which of the following?

A)the investment
B)the customer value proposition
C)the market segment
D)the return on investment

Question 9

The first step in creating your CVP is ______.

A)persuading customers to purchase your product or service
B)persuading customers to sign up for your marketing emails
C)discovering your customers' contact information
D)uncovering what your customer really needs

Question 10

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 ways to obtain customer signatures for received goods
C)the lack of variety in shipping options
D)the lack of prepackaged envelopes

Question 11

What problem did IKEA solve for customers in its CVP?

A)lack of attractive low-cost furniture
B)lack of do-it-yourself furniture
C)lack of European designs
D)lack of antique furniture

Question 12

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 13

How do business models help entrepreneurs create value?

A)by fulfilling unmet needs in an existing market
B)by ensuring profits will be made
C)by guaranteeing the stock will be valued
D)by providing an interview template for new customers

Question 14

A ______ describes the rationale of how a new venture creates,delivers,and captures value.

A)business model
B)business plan
C)mission
D)vision

Question 15

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

A)have a technological component
B)fit into customers' lifestyles
C)fill a large market
D)appeal to affluent customers

Question 16

What are the four parts of a business model?

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

Question 17

Within a business model,customers refer to ______.

A)people who express loyalty to your brand
B)people who have purchased your product or service
C)the people who populate the segments of the market your offering intends to serve
D)the people in the geographic reach of the business

Question 18

BlackBerry,which gained significant market share in the early 2000s in the business,government,and consumer markets,lost market share because ______.

A)demand for smartphones declined
B)competitors offered smartphones with better designs and more features
C)competitors lowered prices to undercut BlackBerry
D)its advertising was not focused on new customers

Question 19

The infrastructure generally includes ______.

A)all the resources that are needed to deliver the CVP
B)only technological resources that are needed to deliver the CVP
C)only financial resources that are needed to deliver the CVP
D)only human resources that are needed to deliver the CVP

Question 20

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

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

Question 21

Breaking customers into groups according to their different needs and problems would create which of the following market types?

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

Question 22

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

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

Question 23

In 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 24

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

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

Question 25

What are the four major categories of problems customers typically experience?

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

Question 26

Which term describes two or more customer segments that are linked but independent of each other?

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

Question 27

Which of the following is considered the "gold standard" for CVPs?

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

Question 28

What type of target market do toilet paper manufacturers target?

A)niche
B)segmented
C)multisided
D)mass

Question 29

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 watch her cook and try samples.Christine will be selling the cookware based on which CVP type?

A)resonating-focus approach
B)points-of-difference approach
C)all-benefits approach
D)product-market fit approach

Question 30

Genetic testing services like 23andMe offer DNA analysis based on a saliva sample submitted by mail.Based on the discussion in the text,what need is 23andMe addressing in their CVP?

A)a lack of benefits
B)a lack of skill
C)a lack of access
D)a lack of money

Question 31

As presented in the text,what major customer problem did ThedaCare hospital system solve in their CVP?

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

Question 32

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)niche market
C)mass market
D)diversified market

Question 33

Which of the following best 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 34

Which of the following allowed Tata Motors to be successful?

A)its low-cost cars
B)its small cars
C)its self-parking cars
D)its line of attractively designed scooters

Question 35

Which term refers to the CVP approach that involves listing all the advantages of your product or service without comparing it to others?

A)product-market fit
B)all-benefits approach
C)resonating-focus approach
D)points-of-difference approach

Question 36

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 problem is Andrew addressing?

A)customers' lack of time
B)customers' lack of money
C)customers' lack of skills
D)customers' lack of networks

Question 37

Gift Prescriptions is a company that offers small gifts that can be left behind in doctors' offices.Gift Prescriptions sells their gifts to pharmaceutical companies and medical supply stores who want to leave doctors a small gift in appreciation for their time.Gift Prescriptions' market segment would be described as a ______ market.

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

Question 38

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

A)a hardware store that sells to contractors and nonprofessionals
B)a dollar store that promotes its low prices
C)a pet store that offers both supplies and small animals
D)a retail shop that sells goods aimed at expectant mothers and babies

Question 39

In the business model canvas (BMC),what components are included in infrastructure?

A)organizational design,facilities,and key resources
B)key assets,key resources,and channels
C)key activities,key resources,key partners
D)cost structure,channels,and key partners

Question 40

In 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

Question 41

Which of the following is the BMC component most involved with building positive feelings about your business and customer loyalty?

A)value proposition
B)customer relationships
C)key activities
D)channels

Question 42

As described in the text,the UK-based nonprofit Wayfindr provides software that can be used by anyone who needs audio instructions to help them navigate public transportation.For vision-impaired public transportation users,the software addresses what problem?

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

Question 43

When determining your revenue streams,which of the following questions is among those you should ask yourself?

A)How do I establish and maintain relationships with customers?
B)How much are my customers willing to pay?
C)What are the most important costs inherent in the business model?
D)What resources are the most expensive to get?

Question 44

An entrepreneur's business model must be flexible in order to respond to new information.

Question 45

As described in the text,entrepreneurs Carlton and Hazel Solle created Bioscarf as an alternative to common filtration masks.This is an example of a ______ market.

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

Question 46

The ______ approach to CVP involves identifying and promoting all the benefits of your product or service relative to the competition and recognizes your offering is unique and different from others in the market.

A)all-benefits
B)points-of-difference
C)resonating-focus
D)product-market fit

Question 47

When entrepreneurs are figuring out suppliers,associates,and distributors,they are determining ______.

A)key resources
B)key partners
C)channels
D)revenue streams

Question 48

What is the right side of the BMC focused on?

A)value delivery
B)value creation
C)idea generation
D)the value proposition

Question 49

A common feature in the stories in the text about IKEA,FedEx,and Tata Motors is that ______.

A)they all sell unique products to a limited number of peer customers
B)each company has created its own processes and resource models to suit its CVP and industry
C)distribution occurs in a different way from traditional services
D)interactions are business to business

Question 50

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

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

Question 51

The infrastructure of the business model does not include people--only technology and facilities.

Question 52

Danielle will be offering a tool-sharpening service at her garden and landscaping store on the first Tuesday of every month.She believes that this fulfills a customer need and that customers will help spread the word about her location and services.On which BMC component is Danielle focusing?

A)value creation
B)customer relationships
C)market segmentation
D)key activities

Question 53

Entrepreneurs should try to address every potential customer in a market.

Question 54

Business models generally discourage experimentation.

Question 55

When determining your cost structure,which of the following questions is among those you should ask yourself?

A)How do I establish and maintain relationships with customers?
B)How much are my customers willing to pay?
C)What activities can be outsourced?
D)What resources are the most expensive to get?

Question 56

If an automobile manufacturer advertised an "automobile for all ages," what market is it addressing?

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

Question 57

Jerry has stated that his business appeals to people 50 years of age and older who are restructuring their finances for retirement plans.What has Jerry defined?

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

Question 58

In the business model canvas (BMC),what components are included in 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 59

For a business model's CVP to be effective,it must offer better value than the competition.

Question 60

What is the left side of the BMC focused on?

A)value delivery
B)value creation
C)idea generation
D)the value proposition

Question 61

Doug Halls describes the one big benefit you offer your customer can be determined by asking the question "Why should I care?".

Question 62

The all-benefits approach produces a stronger CVP than points-of-difference because it focuses on the product or service relative to the competition and recognizes that the offering is unique and different.

Question 63

Amazon serves a diversified market because it has multiple products and services that serve several unrelated groups of customers.

Question 64

In creating their CVPs,both IKEA and FedEx first focused on the jobs that customers needed done before coming up with the solution.

Question 65

Coke and Pepsi are examples of companies that address the mass market.

Question 66

Infrastructure is made up of only the products and suppliers entrepreneurs must have to deliver CVP.

Question 67

In the business model canvas,the offering is comprised of customer relationships and channels.

Question 68

Blackberry and Kodak are discussed in the text as examples of companies that were able to successfully change their business models in order to adapt to changes in the market.

Question 69

A diversified market offers a variety of services to two or more customer segments with different needs and problems,which bear no relationship to each other.

Question 70

The all-benefits approach is the most impactful for creating a value proposition because of its real insight into what the customer wants or needs.

Question 71

The resonating-focus CVP is the "gold standard" because it considers your product or service from the perspective of the customer.

Question 72

Financial viability defines the revenue and cost structures a business needs to meet its expenses and financial obligations.

Question 73

MOOCs disrupted higher education by creating free online courses.

Question 74

The business model is just about revenues and costs.

Question 75

Tata Motors succeeded in resolving the problem of access for its customers.

Question 76

The "value" portion of the customer value proposition is how much you could expect to sell one share of your company in an initial public offering (IPO).

Question 77

Multisided markets describe a variety of services that serve two or more segments with very different needs and problems,which bear no relationship to each other.

Question 78

For Justin Gold of Justin's nut butters,old food processors were part of the infrastructure that made his venture a success.

Question 79

The business plan describes the rationale of how a new venture creates,delivers,and captures value.

Question 80

Delivering existing products and services to existing customers but with unique differentiation is one approach to a business model.