E-commerce 2021: business. technology. society.

, 16e (Laudon/Traver)
Chapter 2 E-commerce Business Models and Concepts
1) ________ 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) Competitive advantage; competitive environment
D) Revenue model; market opportunity

2) Which of the following uses a subscription revenue model for books?

A) Spotify
B) Amazon Kindle Unlimited
C) eHarmony
D) Pandora

3) Which element of the business model addresses what a firm provides that
other firms do not
and cannot?
A) competitive environment
B) competitive advantage
C) market strategy
D) value proposition
4) Which element of the business model refers to the presence of substitute
products in the market?
A) value proposition
B) competitive environment
C) competitive advantage
D) market opportunity

5) 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

6) 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

7) Which of the following does not use a subscription revenue model?

A) Apple Music
B) eHarmony
C) Ancestry
D) Twitter

8) Stickiness is an important attribute for which of the following revenue

models?
A) advertising revenue model
B) subscription revenue model
C) transaction fee revenue model
D) affiliate revenue model

9) Which of the following companies uses a transaction fee revenue model?

A) Yahoo
B) E*Trade
C) Twitter
D) Birchbox

10) Which of the following is an example of the affiliate revenue model?

A) Scribd
B) eBay
C) L.L. Bean
D) MyPoints

11) Which of the following involves a company giving away a certain level of
product or service
without charge, but then charging a fee for premium levels of the product or
service?
A) advertising revenue model
B) subscription revenue model
C) freemium strategy
D) premium strategy
12) 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

13) All of the following can be considered a direct competitor of Priceline

except:
A) Travelocity.
B) Expedia.
C) Orbitz.
D) ESPN.

14) The existence of many 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.

15) All of the following can be considered a direct or indirect competitor of

Amazon except:
A) eBay.
B) Target.
C) Walmart.
D) Priceline.
16) 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.

17) Organizations that typically provide an array of services to startup

companies along with a small amount of funding are referred to as:
A) angel investors.
B) crowdfunders.
C) incubators.
D) venture capital investors.

18) A ________ specifically details how you plan to find customers and to sell
your product
A) sales analysis
B) business plan
C) competitive strategy
D) market strategy

19) Which of the following uses a subscription-based sales revenue model?

A) Yahoo
B) eBay
C) MyPoints
D) Dollar Shave Club
20) All of the following may lead to a competitive advantage except:
A) less expensive suppliers.
B) better employees.
C) fewer products.
D) superior products.

21) Which of the following is an unfair competitive advantage?

A) brand name
B) access to global markets
C) lower product prices
D) superior technology

22) Which of the following gives a business model the most credibility with
outside investors?
A) the firm's management team
B) the firm's value proposition
C) the firm's market opportunity
D) the firm's market strategy

23) Which of the following statements about Foursquare is not true?

A) Foursquare is one of the Internet’s largest location data tracking firms.
B) Foursquare initially struggled to find profitability.
C) The growth in Foursquare’s revenue has been driven primarily by
significant increases in the numbers of users of its Swarm app.
D) Foursquare characterizes itself as a leader on privacy issues.
24) Which type of investor typically becomes interested in a startup company
after it has begun generating revenue?
A) incubators
B) angel investors
C) crowdfunders
D) venture capital investors

25) Which of the following is another name for a revenue model?

A) business model
B) business strategy
C) financial model
D) financial statements

26) All of the following can be considered examples of the market creator
business model except:
A) eBay.
B) Priceline.
C) Uber.
D) Twitter.

27) ________ is defined by a company using its competitive advantage to gain

in surrounding markets.
A) Market strateg
B) Differentiation
C) Leverage
D) Focus
28) A wealthy individual who invests personal funds in a startup in exchange
for an equity share in the business is referred to as a(n):
A) incubator.
B) angel investor.
C) venture capital investor.
D) crowdfunder.

29) Which of the following is not a key element of an elevator pitch?

A) exit strategy
B) growth metrics
C) legal structure
D) market opportunity

30) First movers often fail because:

A) their competitive advantage is unfair.
B) they lack complementary resources needed to sustain their advantages.
C) they are operating in a perfect market.
D) they fail to leverage their competitive assets.

31) Which of the following types of crowdfunding involves people making

contributions to others with no expectation of any return?
A) donor-based crowdfunding
B) rewards-based crowdfunding
C) equity crowdfunding
D) regulation crowdfunding
32) A value proposition defines how a company's product or service will
generate revenue for the firm.
Answer: FALSE

33) Real markets are imperfect.

Answer: TRUE

34) Information asymmetries enable some firms to have an edge over others.
Answer: TRUE

35) Slow followers are sometimes more successful than first movers.
Answer: TRUE

36) In the subscription revenue model, a company primarily generates income

from the display
of ads.
Answer: FALSE

37) GoFundMe is a prominent example of a rewards-based crowdfunding site.

Answer: FALSE

42) Which of the following is not a community provider?

A) LinkedIn

B) Facebook
C) Blue Nile
D) Pinterest
43) 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

44) Which of the following is an example of a company using the content

provider model?
A) Priceline
B) Netflix
C) Dell
D) eBay

45) Which of the following is not an example of the bricks-and-clicks e-tailing

business model?
A) Walmart
B) Target
C) Bluefly
D) Staples

46) 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.
47) All of the following primarily use an advertising revenue model except:
A) Facebook.
B) Yahoo.
C) Google.
D) Walmart.

48) Which of the following is not considered a portal?

A) Yahoo
B) MSN
C) Amazon
D) AOL

49) 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.

50) 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 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.
51) 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

52) All of the following are business models employed in the online music
industry except:
A) subscription.
B) peer-to-peer streaming.
C) download-and-own.
D) cloud streaming.

53) The financial services, travel services, and job placement services industries
typically use the________ business model.
A) community provider
B) transaction broker
C) market creator
D) e-tailer

54) In the ________ business model, a web-based business builds a digital

environment in which buyers and sellers can meet, display products, search for
products, and establish prices.
A) market creator
B) community provider
C) e-tailer
D) portal
55) On-demand service companies are characterized by the free sharing of
resources between the company and consumers.
Answer: FALSE

57) All of the following are examples of business-to-business (B2B) business

models except:
A) e-distributors.
B) e-procurement.
C) exchanges.
D) portals.

58) What is the primary revenue model for an e-distributor?

A) sales
B) transaction fee
C) advertising
D) subscription

59) Grainger is an example of which of the following business models?

A) B2B service provider
B) exchange
C) e-distributor
D) industry consortia

60) Ariba Supplier Network is an example of a(n):

A) e-distributor.
B) portal.
C) e-procurement firm.
D) industry consortium.
61) Which of the following may offer its customers value chain management
software?
A) e-distributors
B) e-procurement companies
C) exchanges
D) community providers

62) 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.

63) The Seam is an example of a(n):

A) private industrial network.
B) exchange.
C) industry consortium.
D) e-distributor.

64) A ________ marketplace supplies products and services of interest to a

particular industry.
A) perfect
B) differentiated
C) horizontal
D) vertical
65) SaaS and PaaS providers can typically provide services at lower costs
through scale economies.
Answer: TRUE

67) A ________ refers to a competitive strategy in which firms attempt to

achieve lower business process costs.
A) strategy of cost competition
B) scope strategy
C) customer intimacy strategy
D) focus/market niche strategy

68) 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

69) Which of the following is not a primary activity in a firm value chain?
A) outbound logistics
B) finance/accounting
C) operations
D) after-sales service
70) A ________ is a networked business ecosystem that 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

71) 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.

72) A strategy designed to compete within a narrow market or product segment

is called a ________ strategy.
A) scope
B) differentiation
C) commoditization
D) focus

73) ________ technologies are technologies that enable the incremental

improvement of products and services.
A) Sustaining
B) Differentiating
C) Disruptive
D) Commodity
74) Innovative entrepreneurs and their business firms that destroy existing
business models are referred to as:
A) crowdfunders.
B) venture capitalists.
C) disruptors.
D) angel investors.
Answer: C