TestBank CH 2-7 - MCQ & TF ONLY Exam (elaborations) ECOM101

E-commerce 2013, 9e (Laudon/Traver) Chapter 2 E-commerce Business Models and Concepts 1) A value proposition defines how a company's product or service fulfills the needs of a customer. Answer: TRUE 2) The terms revenue model and financial model can be used interchangeably. Answer: TRUE 3) In order to be considered successful, a firm must produce returns greater than alternative investments. Answer: TRUE 4) An asymmetry exists whenever one participant in a market has more resources than other participants. Answer: TRUE 5) Most first movers have the complementary resources needed to sustain their advantage. Answer: FALSE 6) All firms need an organization to efficiently implement their business plans and strategies. Answer: TRUE 7) Visitors to specialized niche vortals tend to spend less money than the average visitor to a horizontal portal. Answer: FALSE 8) Barriers to entry into the e-tail marketplace are high. Answer: FALSE 9) Differentiation refers to situations in which there is little difference between products and the only basis of choosing a product is price. Answer: FALSE 10) Scale economies are efficiencies that result from flattening the hierarchy of an organization. Answer: FALSE 11) Real markets are perfect markets. Answer: FALSE 12) The Internet's universal standards decrease the cost of industry and firm operations. Answer: TRUE 13) Interactivity that enables product customization alters industry structure by reducing the threat of substitutes. Answer: TRUE 14) Interfirm rivalry is one area of the business environment where e-commerce technologies have had an impact on most industries. Answer: TRUE 15) Social technologies change industry structure by shifting programming and editorial decisions to consumers. Answer: TRUE 16) ________ and ________ are typically the most easily identifiable aspects of a company's business model. A) Market strategy; market opportunity B) Value proposition; revenue model C) Value proposition; competitive environment D) Revenue model; market strategy Answer: B 17) All of the following are key elements of a business model except: A) competitive environment. B) organizational development. C) information technology strategy. D) market strategy. Answer: C 18) Which element of the business model addresses the question of why a customer should buy from the firm? A) revenue model B) competitive advantage C) market strategy D) value proposition Answer: D 19) Which element of the business model examines who else occupies the firm's intended marketspace? A) value proposition B) competitive environment C) competitive advantage D) market strategy Answer: B 20) Which of the following are Amazon's primary value propositions? A) personalization and customization B) selection and convenience C) reduction of price discovery cost D) management of product delivery Answer: B 21) Your solar-panel manufacturing firm has developed a unique and patented process for creating high-efficiency solar panels at a fraction of current costs. This will enable your firm to adopt a strategy of: A) cost competition. B) scope. C) scale. D) focus. Answer: A 22) A firm's ________ describes how a firm will produce a superior return on invested capital. A) value proposition B) revenue model C) market strategy D) competitive advantage Answer: B 23) Which of the following is an example of the subscription revenue model? A) A B) eBay C) Amazon D) Twitter Answer: A 24) Stickiness is an important attribute for which revenue model? A) advertising revenue model B) subscription revenue model C) transaction fee revenue model D) sales revenue model Answer: A