Question 1

A business model is a firm's plan or diagram for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the profits it earns.

Accepted Answer

This statement accurately defines a business model.

Question 2

Their is a standard business model that most startups follow.

Accepted Answer

While there are some common elements that many successful startups share, there is no single standard business model that all startups must follow. Each startup is unique and may require its own customized approach to succeed.

Question 3

Gary Smith just launched a firm in the sports drink industry. He has decided to focus his efforts on appealing to extreme sports enthusiasts (examples include hang gliders, rock climbers, and parachutists). In Gary's case, extreme sports enthusiasts represent his firm's:
A) target objective
B) target market
C) goal objective
D) intention market
E) object market

Accepted Answer

Extreme sports enthusiasts are the group that Gary's firm is targeting with their sports drink product, which makes them his target market.

Question 4

The clothing retailer Abercrombie & Fitch targets 18- to 22-year-old men and women. This demographic is Abercrombie & Fitch's:
A) target objective
B) objective market
C) goal objective
D) intention market
E) target market

Accepted Answer

The group of 18- to 22-year-old men and women is Abercrombie & Fitch's target market, meaning it is the specific group of consumers toward whom the company's marketing efforts are aimed.

Question 5

Fortunately, if three of the four components of a firm's business model are in place, the firm has a high probability of success.

Accepted Answer

The answer of Fortunately, if three of the four components...

Question 6

A ________ is a group of organizations with similar needs that band together to create a new entity to address those needs.
A) joint venture
B) network
C) consortia
D) strategic alliance
E) trade association

Accepted Answer

A consortium is a group of organizations with similar needs that join together to create a new entity to address those needs. Joint ventures involve two or more organizations forming a new entity for a specific business purpose. Networks are informal groups of organizations or individuals who share information and resources. Strategic alliances involve two or more organizations coming together to achieve a specific goal, often through joint projects or partnerships. Trade associations are organizations representing a specific industry or profession.

Question 7

Fulfillment and support describes:
A) how a firm manages its customer relationships
B) the way a firm's product or service "goes to market" or how it reaches its customers
C) how a firm manages its employees
D) the products and markets on which a firm will compete
E) how a firm competes relative to its competitors

Accepted Answer

The answer of Fulfillment and support describes:
A) how a firm...

Question 8

By studying a product's value chain, an organization can identify ways to create additional value and assess whether it has the means to do so.

Accepted Answer

By analyzing each step in a product's value chain, including design, production, marketing, distribution and customer service, a company can identify areas where it can create additional value and find ways to differentiate itself from competitors. This analysis also helps companies to identify opportunities for cost savings and process improvements.

Question 9

A firm's ________ is the limited group of individuals or businesses that it goes after or tries to appeal to.
A) target objective
B) goal objective
C) intention market
D) target market
E) object market

Accepted Answer

A firm's target market is the specific group of consumers or businesses that it aims to appeal to. This includes factors such as demographics, psychographics, and behavioral characteristics that make a particular group more likely to be interested in the firm's products or services. By defining a target market, a firm can focus its marketing efforts and resources more effectively, increasing the chances of success. Options A, B, C, and E are not accurate descriptions of a firm's target market.

Question 10

Organizations (typically nonprofit) that are formed by firms in the same industry to collect and disseminate trade information, offer legal and technical advice, furnish industry-related training, and provide a platform for collective lobbying.
A) strategic alliance
B) trade association
C) network
D) joint venture
E) consortia

Accepted Answer

Trade associations are specifically formed by firms in the same industry to collectively address industry-related issues such as trade information, legal advice, training, and lobbying. Strategic alliances, networks, joint ventures, and consortia may involve firms from any industry and serve different purposes.

Question 11

A clearly articulated business model serves as an ongoing extension of feasibility analysis.

Accepted Answer

A business model outlines how a company plans to generate revenue and create value for its customers. It helps to assess the feasibility of a business idea and serves as an ongoing guide for the company's operations, growth, and sustainability. Therefore, a well-defined business model can be seen as an extension of feasibility analysis.

Question 12

The four components of an effective business model include: core strategy, strategic resources, partnership network, and customer interface.

Accepted Answer

This statement is true. The four components of an effective business model are core strategy, strategic resources, partnership network, and customer interface.

Question 13

________, a relatively new approach to partnering, takes place when a service provided comes inside a partner's facilities and helps the partner design and manage its supply chain.
A) Permeating
B) Infiltrating
C) Penetrating
D) Fullfilling
E) Insourcing

Accepted Answer

The approach described in the question is insourcing, as it involves a third-party service provider coming into a partner's facilities to help design and manage the supply chain. The other choices (permeating, infiltrating, penetrating, fulfilling) do not accurately describe this approach.

Question 14

The support activities in a firm's value chain include: inbound logistics, operations, outbound logistics, marketing and sales, and service.

Accepted Answer

The activities mentioned are actually the primary activities in a firm's value chain. The support activities usually include procurement, technology development, human resource management, and firm infrastructure.

Question 15

Two fatal flaws can render a business model untenable from the beginning: a complete misread of the customer and utterly unsound economics.

Accepted Answer

A business model must have a clear understanding of the target customer and the economic viability of the model. Ignoring either of these aspects can result in failure from the start.

Question 16

A firm's business model resides within its own boundaries.

Accepted Answer

The answer of A firm's business model resides within its...

Question 17

In a business model context, the three components of a firm's customer interface are target customer, fulfillment and support, and:
A) pricing structure
B) product/market scope
C) basic for differentiation
D) strategic assets
E) business mission

Accepted Answer

The answer of In a business model context, the three...

Question 18

________ describes the way a firm's product or service "goes to market."
A) Fulfillment and support
B) Execution and discharge
C) Achievement and discharge
D) Implementation and maintenance
E) Execution and maintenance

Accepted Answer

Fulfillment and support refer to the processes involved in delivering a product or service to the market and providing ongoing customer support.

Question 19

An arrangement between two or more firms that establishes an exchange relationship but has no joint ownership involved is called a:
A) network
B) trade association
C) consortia
D) joint venture
E) strategic alliance

Accepted Answer

A strategic alliance is an agreement between two or more firms to cooperate in a specific business area, without involving any joint ownership. The firms involved in a strategic alliance work together and share resources and knowledge to achieve their common goals. A network refers to a group of firms that are connected through informal relationships, whereas a trade association is an organization that represents the interests of its members in a specific industry. Consortia and joint ventures both involve a degree of joint ownership and operational control.

Question 20

Almost all firms partner with others to make their business models work.

Accepted Answer

This is true, as partnerships and collaborations are common in business to create value, expand reach, and leverage expertise and resources.

Quiz 6: Developing an Effective Business Model

A business model is a firm's plan or diagram for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the profits it earns.

Their is a standard business model that most startups follow.

Gary Smith just launched a firm in the sports drink industry. He has decided to focus his efforts on appealing to extreme sports enthusiasts (examples include hang gliders, rock climbers, and parachutists) . In Gary's case, extreme sports enthusiasts represent his firm's:

The clothing retailer Abercrombie & Fitch targets 18- to 22-year-old men and women. This demographic is Abercrombie & Fitch's:

Fortunately, if three of the four components of a firm's business model are in place, the firm has a high probability of success.

A ________ is a group of organizations with similar needs that band together to create a new entity to address those needs.

Fulfillment and support describes:

By studying a product's value chain, an organization can identify ways to create additional value and assess whether it has the means to do so.

A firm's ________ is the limited group of individuals or businesses that it goes after or tries to appeal to.

Organizations (typically nonprofit) that are formed by firms in the same industry to collect and disseminate trade information, offer legal and technical advice, furnish industry-related training, and provide a platform for collective lobbying.

A clearly articulated business model serves as an ongoing extension of feasibility analysis.

The four components of an effective business model include: core strategy, strategic resources, partnership network, and customer interface.

________, a relatively new approach to partnering, takes place when a service provided comes inside a partner's facilities and helps the partner design and manage its supply chain.

The support activities in a firm's value chain include: inbound logistics, operations, outbound logistics, marketing and sales, and service.

Two fatal flaws can render a business model untenable from the beginning: a complete misread of the customer and utterly unsound economics.

A firm's business model resides within its own boundaries.

In a business model context, the three components of a firm's customer interface are target customer, fulfillment and support, and:

________ describes the way a firm's product or service "goes to market."

An arrangement between two or more firms that establishes an exchange relationship but has no joint ownership involved is called a:

Almost all firms partner with others to make their business models work.