Ch. 2 Pretest

What gives a business model the most credibility with outside investors?

A firm's management team

A wealthy individual who invests personal funds in a start-up in exchange for an equity stock in the business is referred to as a(n) ________.

Angel Investor

Which element of the business model refers to the presence of substitute products in the market?

Competitive Environment

(T/F) An asymmetry exists whenever all participants in a market have equivalent resources.

False

(T/F) Interactivity that enables product customization alters industry structure by increasing the threat of substitutes.

False

(T/F) Scale economies are efficiencies that result from flattening the hierarchy of an organization.

False

A ________ specifically details how you plan to find customers and to sell your product.

Market Strategy

A firm's ________ describes how a firm will produce a superior return on invested capital.

Revenue Model

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

Sales

________ technologies are technologies that enable the incremental improvement of products and services.

Sustaining

The existence of a large number of competitors in any one market segment may indicate:

The market is saturated

(T/F) A value proposition defines how a company's product or service fulfills the needs of a customer.

True

________ and ________ are typically the most easily identifiable aspects of a company's business model.

Value proposition; revenue model

Stickiness is an important attribute for which of the following revenue models?

Advertising revenue model

Which of the following is not considered a portal? -Amazon -Yahoo -MSN -Google

Amazon

Which of the following is not an example of the bricks-and-clicks e-tailing business model? -Sears -Bluefly -Staples -Walmart

Bluefly

What is an example of an unfair competitive advantage?is an unfair competitive advantage?

Brand name

________ create and sell access to digital markets.

E-procurement firms

(T/F) E-commerce has increased price competition in nearly all markets.

True

A strategy designed to compete within a narrow market or product segment is called a ________ strategy.

Focus

What involves a company giving away a certain level of product or services without charge, but then charging a fee for premium levels of the product or service?

Freemium Strategy

A perfect market is one in which:

There are no competitive advantages or asymmetries because all firms have equal access to all the factors to production

The basic value proposition of community providers is:

They offer a fast, convenient one-stop site where users can focus on their most important concerns and interests

The financial services, travel services, and job placement services industries typically use the ________ business model.

Transaction Broker

(T/F) Firms that fail to produce returns greater than alternative investments typically go out of business.

True

(T/F) Social technologies change industry structure by shifting programming and editorial decisions to consumers and creating substitute entertainment products.

True

Which type of investor typically becomes interested in a start-up company after it has begun generating revenue?

Venture Capital Investors

A ________ marketplace supplies products and services of interest to particular industries.

Vertical