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E-commerce Chapter 2 MCQ

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) Ancestry.com
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
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
29) Which of the following would be considered an indirect competitor of American Airlines?
A) JetBlue
B) Zipcar
C) Orbitz
D) British Airways
Answer: B
30) The existence of a large number of competitors in any one market segment may indicate:
A) an untapped market niche.
B) the market is saturated.
C) no one firm has differentiated itself within that market.
D) a market that has already been tried without success.
Answer: B
31) All of the following can be considered a direct or indirect competitor of Amazon.com except:
A) eBay.
B) Apple’s iTunes Store.
C) Barnesandnoble.com.
D) Starbucks.
Answer: D
32) A perfect market is one in which:
A) there are no competitive advantages or asymmetries because all firms have equal access to all the factors to production.
B) one firm develops an advantage based on a factor of production that other firms cannot purchase.
C) one participant in the market has more resources than the others.
D) competition is at a minimum, as each niche market within an industry is served by the company with the greatest competitive advantage.
Answer: A
33) The business model of e-distributors is quite similar to that of:
A) e-tailers.
B) transaction brokers.
C) exchanges.
D) service providers.
Answer: A
34) All of the following use an advertising revenue model except:
A) Facebook.
B) Yahoo.
C) Google.
D) Amazon.
Answer: D
35) Organizations that provide not only funding but also an array of services to start-up companies are referred to as:
A) angel investors.
B) crowdfunders.
C) incubators.
D) venture capital investors.
Answer: C
36) Which of the following is not considered a portal?
A) Yahoo
C) WSJ.com
Answer: C
37) Horizontal or general portals primarily generate revenue in all of the following ways except:
A) charging advertisers for ad placement.
B) collecting transaction fees.
C) sales of goods.
D) charging subscription fees.
Answer: C
38) A business document that specifically details how you plan on selling your product and find new customers is called a:
A) sales analysis.
B) business plan.
C) competitive strategy.
D) market strategy.
Answer: D
39) Which of the following is not a community provider?
A) LinkedIn
B) Facebook
C) Priceline
D) Pinterest
Answer: C
40) Which of the following is not a variation of the e-tailer business model?
A) bricks-and-clicks
B) virtual merchant
C) market creator
D) manufacturer-direct
Answer: C
41) An example of a company using the content provider model is:
A) Priceline.
B) Rhapsody.com.
C) Dell.
D) eBay.
Answer: B
42) Which of the following is not an example of the bricks-and-clicks e-tailing business model?
A) Walmart.com
B) JCPenney.com
C) Dell.com
D) Staples.com
Answer: C
43) The overall retail market in the United States in 2013 was estimated at about:
A) $39 trillion.
B) $3.9 trillion.
C) $390 billion.
D) $39 billion.
Answer: B
44) In general, the key to becoming a successful content provider is to:
A) own the content being provided.
B) own the technology by which content is created, presented, and distributed.
C) provide online content for free.
D) provide other services as well as online content.
Answer: A
45) Which of the following was not able to successfully implement a freemium business model?
A) Pandora
B) MailChimp
C) Evernote
D) Ning
Answer: D
46) All of the following may lead to a competitive advantage except:
A) less expensive suppliers.
B) better employees.
C) fewer products.
D) superior products.
Answer: C
47) The basic value proposition of community providers is:
A) they offer a fast, convenient one-stop site where users can focus on their most important concerns and interests.
B) they offer consumers valuable, convenient, time-saving, and low cost alternatives to traditional service providers.
C) they create a digital electronic environment for buyers and sellers to meet, agree on a price, and transact.
D) they increase customers’ productivity by helping them get things done faster and more cheaply.
Answer: A
48) All of the following are examples of business-to-business (B2B) business models except:
A) e-distributors.
B) e-procurement.
C) private industrial networks.
D) e-tailers.
Answer: D
49) What is the primary revenue model for an e-distributor?
A) sales
B) transaction fee
C) advertising
D) subscription
Answer: A
50) Grainger.com is an example of which of the following business models?
A) B2B service provider
B) exchange
C) e-distributor
D) industry consortia
Answer: C
51) ________ create and sell access to digital electronic markets.
A) E-distributors
B) Portals
C) E-procurement firms
D) Market creators
Answer: C
52) One of the competitive advantages of a B2B service provider is that it can spread the cost of an expensive software system over many users, achieving efficiencies referred to as:
A) application efficiencies.
B) network efficiencies.
C) scale economies.
D) network externalities.
Answer: C
53) Over the past decade, the number of exchanges has:
A) greatly increased.
B) diminished sharply.
C) stayed about the same.
D) increased slowly but steadily.
Answer: B
54) Exostar is an example of a(n):
A) private industrial network.
B) exchange.
C) industry consortium.
D) e-distributor.
Answer: C
55) Which of the following is an unfair competitive advantage?
A) brand name
B) access to global markets
C) lower product prices
D) superior technology
Answer: A
56) The element of a business model that is responsible for making the model work is:
A) the management team.
B) the organizational structure.
C) the firm’s key competitive advantage.
D) the market strategy.
Answer: A
57) eBay uses all of the following business models except:
A) B2C market creator.
B) C2C market creator.
C) content provider.
D) e-commerce infrastructure provider.
Answer: C
58) Your startup firm has developed Web-based note-taking software that allows participants to create and share virtual notes attached to existing Web pages. You anticipate marketing your online application to Web development and design companies. Which of the following revenue models is the most appropriate for your new company?
A) advertising
B) transaction fee
C) affiliate
D) subscription
Answer: D
59) Which type of investor typically becomes interested in a start-up company after it has begun generating revenue?
A) incubators
B) angel investors
C) crowdfunders
D) venture capital investors
Answer: D
60) Which of the following features of e-commerce technology changes industry structure by lowering barriers to entry but greatly expands the market at the same time?
A) global reach
B) richness
C) interactivity
D) personalization
Answer: A
61) All of the following are business models employed by the music industry except:
A) subscription.
B) peer-to-peer streaming.
C) download-and-own.
D) cloud streaming.
Answer: B
62) Which of the following is not a primary activity in a firm value chain?
A) inbound logistics
B) finance/accounting
C) operations
D) sales and marketing
Answer: B
63) A ________ coordinates a firm’s suppliers, distributors, and delivery firms with its own production needs using an Internet-based supply chain management system.
A) value chain
B) value system
C) value web
D) business strategy
Answer: C
64) If you wished to leverage the ubiquitous nature of the Web to differentiate your product, you would:
A) enable individual customization of the product by consumers.
B) implement a strategy of commoditization.
C) adopt a strategy of cost competition.
D) develop a scope strategy to compete within a narrower market segment.
Answer: A
65) A strategy designed to compete within a narrow market or product segment is called a ________ strategy.
A) scope
B) differentiation
C) cost
D) focus
Answer: D

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