ISOM 351 UNIT 1 QUESTIONS AND
CORRECT ANSWERS
\Q\.What does alignment mean? - ANSWERS✔-- Strategy, business model, and execution must
be connected and consistent
- Decisions about one must be made with consideration of each of the others (aka
interconnectedness, consistency)
\Q\.What does the BMC do? - ANSWERS✔-Helps align strategy & execution; helps align internal
capabilities to market expectations
\Q\.4 elements of strategy - ANSWERS✔-Decisions, tradeoffs, activities, resources
\Q\.What are the goals of strategy? - ANSWERS✔-- Competitive advantage
- Create, capture, and deliver value
\Q\.4 questions that a business model answers - ANSWERS✔-Who is the customer? What does
the customer value? How do we make money in this business? What is the underlying economic
logic that explains how we can deliver value to customers at an appropriate cost?
\Q\.Business model vs strategy - ANSWERS✔-Business model describes how your business runs,
while strategy explains how you will do better than your rivals
, \Q\.Right side of the BMC - ANSWERS✔-Who are our customers (segments), what problem do
they want solved (value proposition), how do they want to interact with us (relationships), and
how do they want to get access to our service or product (channels)?
\Q\.Left side of the BMC - ANSWERS✔-key partners, key activities, key resources, value
propositions
- "the operating model," how the firm executes strategy
\Q\.Bottom of the BMC - ANSWERS✔-Economic logic = cost structure, revenue streams
\Q\.Willingness to pay - ANSWERS✔-Belongs to the customer; the maximum amount of money
a customer would spend in order to solve their problem; aka benefits
\Q\.Price - ANSWERS✔-the amount of a money a customer actually spends to buy the
product/service
\Q\.Total cost - ANSWERS✔-the total cost incurred by the company in order to make the service
or product available to the customer
\Q\.Input cost - ANSWERS✔-the cost incurred by the company in order to acquire all basic
materials and equipment needed to deliver the service or product
\Q\.WTP - TC = ? - ANSWERS✔-value created
\Q\.Price - TC = ? - ANSWERS✔-value captured by the firm
\Q\.WTP - Price = ? - ANSWERS✔-consumer surplus: the amount of value, created by the
business and the customer, that the customer gets to keep
CORRECT ANSWERS
\Q\.What does alignment mean? - ANSWERS✔-- Strategy, business model, and execution must
be connected and consistent
- Decisions about one must be made with consideration of each of the others (aka
interconnectedness, consistency)
\Q\.What does the BMC do? - ANSWERS✔-Helps align strategy & execution; helps align internal
capabilities to market expectations
\Q\.4 elements of strategy - ANSWERS✔-Decisions, tradeoffs, activities, resources
\Q\.What are the goals of strategy? - ANSWERS✔-- Competitive advantage
- Create, capture, and deliver value
\Q\.4 questions that a business model answers - ANSWERS✔-Who is the customer? What does
the customer value? How do we make money in this business? What is the underlying economic
logic that explains how we can deliver value to customers at an appropriate cost?
\Q\.Business model vs strategy - ANSWERS✔-Business model describes how your business runs,
while strategy explains how you will do better than your rivals
, \Q\.Right side of the BMC - ANSWERS✔-Who are our customers (segments), what problem do
they want solved (value proposition), how do they want to interact with us (relationships), and
how do they want to get access to our service or product (channels)?
\Q\.Left side of the BMC - ANSWERS✔-key partners, key activities, key resources, value
propositions
- "the operating model," how the firm executes strategy
\Q\.Bottom of the BMC - ANSWERS✔-Economic logic = cost structure, revenue streams
\Q\.Willingness to pay - ANSWERS✔-Belongs to the customer; the maximum amount of money
a customer would spend in order to solve their problem; aka benefits
\Q\.Price - ANSWERS✔-the amount of a money a customer actually spends to buy the
product/service
\Q\.Total cost - ANSWERS✔-the total cost incurred by the company in order to make the service
or product available to the customer
\Q\.Input cost - ANSWERS✔-the cost incurred by the company in order to acquire all basic
materials and equipment needed to deliver the service or product
\Q\.WTP - TC = ? - ANSWERS✔-value created
\Q\.Price - TC = ? - ANSWERS✔-value captured by the firm
\Q\.WTP - Price = ? - ANSWERS✔-consumer surplus: the amount of value, created by the
business and the customer, that the customer gets to keep
