E-commerce
E-commerce, 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
,E-commerce
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
,E-commerce
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) Ancestry.com
B) eBay
C) Amazon
D) Twitter
Answer: A
, E-commerce
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
25) Which of the following companies utilizes a transaction fee revenue model?
A) WSJ.com
B) E*Trade
C) Twitter
D) Sears.com
Answer: B
26) Which of the following is an example of the affiliate revenue model?
A) Yahoo
B) eBay
C) Gap.com
D) MyPoints
Answer: D
27) Assume you are analyzing the market opportunity of a distance learning company,
Learnmore.com, that creates education courses delivered over the Internet for the Fortune 1000
corporate market. Assume that the overall size of the distance learning market is $25 billion.
The overall market can be broken down into three major market segments: Corporate, College,
and Elementary/High School, each of which accounts for a third of the market. Within the
Corporate market, there are two market niches: Fortune 1000, which accounts for 60% of the
market, and all others, which together account for 40% of the market. What is Learnmore.com's
realistic market opportunity, approximately?
A) $5 billion
B) $6.6 billion
C) $165 billion
D) $25 billion
Answer: A
28) Which of the following factors is not a significant influence on a company's
competitive environment?
A) how many competitors are active
B) what the market share of each competitor is
C) the availability of supportive organizational structures
D) how competitors price their
products Answer: C
E-commerce, 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
,E-commerce
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
,E-commerce
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) Ancestry.com
B) eBay
C) Amazon
D) Twitter
Answer: A
, E-commerce
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
25) Which of the following companies utilizes a transaction fee revenue model?
A) WSJ.com
B) E*Trade
C) Twitter
D) Sears.com
Answer: B
26) Which of the following is an example of the affiliate revenue model?
A) Yahoo
B) eBay
C) Gap.com
D) MyPoints
Answer: D
27) Assume you are analyzing the market opportunity of a distance learning company,
Learnmore.com, that creates education courses delivered over the Internet for the Fortune 1000
corporate market. Assume that the overall size of the distance learning market is $25 billion.
The overall market can be broken down into three major market segments: Corporate, College,
and Elementary/High School, each of which accounts for a third of the market. Within the
Corporate market, there are two market niches: Fortune 1000, which accounts for 60% of the
market, and all others, which together account for 40% of the market. What is Learnmore.com's
realistic market opportunity, approximately?
A) $5 billion
B) $6.6 billion
C) $165 billion
D) $25 billion
Answer: A
28) Which of the following factors is not a significant influence on a company's
competitive environment?
A) how many competitors are active
B) what the market share of each competitor is
C) the availability of supportive organizational structures
D) how competitors price their
products Answer: C
