Question 1

Products often go through channel intermediaries such as _____ and _____.

Accepted Answer

Products often go through channel intermediaries such as distributors and retailers. Distributors help to move products from manufacturers to retailers, and retailers sell the products to the final consumers.

Question 2

Probabilities can be attached to uncertainty.

Accepted Answer

False

Question 3

The term _____ has been conceptualized as the activities or tasks that a business undertakes as an "analytical device for evaluation and action," or as a "blueprint" for running a business.

Accepted Answer

The term "business model" is conceptualized as the activities or tasks that a business undertakes as an "analytical device for evaluation and action," or as a "blueprint" for running a business. It outlines how a company creates, delivers, and captures value.

Question 4

Manufacturing costs are considered to be fixed costs.

Accepted Answer

Manufacturing costs can be both fixed and variable. Fixed costs do not change with the level of production (e.g., rent, salaries), while variable costs do change with production volume (e.g., raw materials, direct labor).

Question 5

Costs that produce the biggest impact on the cost structure are known as

Accepted Answer

Key cost drivers are the specific costs that have the most significant impact on a company's overall cost structure, influencing the total cost of production or service delivery.

Question 6

Depending on the type of business, which of the following forms can a cost structure take?

Accepted Answer

All of the options listed (marketing or advertising cost structure, inventory cost structure, direct cost structure, and office or retail space cost structure) are forms that a cost structure can take, depending on the type of business. Each represents a different aspect of business expenses that can significantly impact the overall cost strategy of a company.

Question 7

In reality, a great deal of luck is more important than thought and effort before a company's products or services ever successfully reach the market.

Accepted Answer

While luck can play a role in the success of a company's products or services, thorough planning, market research, product quality, effective marketing strategies, and hard work are generally more important factors in achieving success.

Question 8

Because all of the components of the business model are interrelated, a change in one component affects all the others to some degree.

Accepted Answer

Changes in one component of a business model often necessitate adjustments in other components due to the interconnected nature of the model, where each part can influence and be influenced by others.

Question 9

In the context of value proposition, which of the following is a feature of a product?

Accepted Answer

A feature of a product refers to its characteristics or attributes, such as design, which is a tangible aspect of the product.

Question 10

At its essence, the business model reflects the strategic decisions and trade-offs that entrepreneurs make to earn a profit.

Accepted Answer

The business model outlines how a company creates, delivers, and captures value, which inherently involves strategic decisions and trade-offs to ensure profitability.

Question 11

Benefits reflect attributes of a product such as design and physical characteristics or functions.

Accepted Answer

Benefits refer to the value or advantage that a customer perceives from a product's attributes, not the attributes themselves. Attributes are the inherent qualities or features of a product, while benefits are what the customer can gain or achieve by using those attributes.

Question 12

Which of the following can cause a change in a business model?

Accepted Answer

All the options listed can cause a change in a business model. Expanding geographically, revitalizing, entering new areas, and acquisitions are all strategies that can significantly alter how a business operates, its target market, and its revenue streams.

Question 13

In the context of value proposition, which of the following is NOT considered a benefit to the customer?

Accepted Answer

Recyclable packaging is more of a feature related to sustainability and environmental responsibility rather than a direct benefit to the customer's personal or immediate needs, unlike reliability, speed, convenience, or better health, which directly benefit the customer.

Question 14

The distribution channel answers the question "How do you deliver the benefit to the customer?"

Accepted Answer

The distribution channel is a key element in the marketing mix that outlines the process of delivering a product or service from the producer to the customer, effectively answering the question of how the benefit is delivered to the customer.

Question 15

Which of the following is NOT a component of a business model?

Accepted Answer

Stakeholder pressure is not considered a direct component of a business model. Business models typically include elements that describe how a company creates, delivers, and captures value, such as strategic partners, customer segments, value proposition, and distribution channels. Stakeholder pressure, while it can influence a business model, is not a component of the model itself.

Question 16

_____ a market is dividing it into meaningful and measurable parts based on needs, buyer behaviors, and demographics.

Accepted Answer

Segmenting a market involves dividing it into distinct groups of buyers with different needs, characteristics, or behaviors who might require separate products or marketing mixes.

Question 17

Startups that find themselves trying to compete for value with large, established firms that have strong negotiating power often focus on the acquisition of intellectual property and know-how that they can control and develop to where it is attractive to one of the dominant firms.

Accepted Answer

Startups often focus on acquiring intellectual property and know-how to develop unique offerings or technologies that are attractive to larger firms. This strategy can provide a competitive edge and make them appealing targets for acquisition or partnership, especially when competing directly with established firms is challenging due to the latter's strong negotiating power and market dominance.

Question 18

Drucker's five questions are the basis for the development of a business model.

Accepted Answer

Peter Drucker's five questions help organizations understand their purpose, customers, and value proposition, which are essential components of a business model.

Question 19

The value proposition is the benefit that a company derives from a product or service it produces; in other words, it is the reason for the company to be in business.

Accepted Answer

The value proposition is the benefit that a customer receives from a product or service, explaining why they should choose it over competitors, not the benefit to the company producing it.

Question 20

One of the most important components of the business model is identifying the _____ that will flow from the products and services being offered.

Accepted Answer

Identifying the revenue streams is crucial in a business model because it defines how a company will earn money from its products and services.

Quiz 5: Developing and Testing a Business Model

Products often go through channel intermediaries such as _ and _.

Probabilities can be attached to uncertainty.