Ch 7

1. Initially, Amazon adopted the domain of a non-profit organization.

False

1. Many pundits assumed Amazon would fail. Why? a. the firm was losing money and competing against established, well known, offline brands who were going online. b. Amazon was too short-term focused. c. the firm was based in Seattle, rather than Silicon Valley. d. Amazon sales were not increasing. e. all of the above.

a

1. Which of the following is considered one of the three 'pillars' critical to Amazon's business success? a. Large selection b. Niche customers c. Inimitable technology d. Dynamic pricing e. Firm-owned brands

a

11. In order to achieve a negative cash conversion cycle a firm would want to: a. increase its account payable period and its inventory turns. b. decrease its account payable period and its inventory turns. c. increase its account payable terms and decrease its inventory turns. d. decrease its account payable terms and increase its inventory turns. e. analyze systems and stop whatever processes are causing this, since a negative cash conversion cycle is associated with losses, not profits.

a

12. Dynamic pricing: a. refers to pricing that shifts over time based on conditions associated with product supply and demand. b. refers to pricing that is always a notch higher than competition. c. refers to pricing strategies that focuses on consistency even if environmental conditions fluctuate wildly. d. is also known as the bargaining power of customers. e. refers to pricing that is always a notch below competition.

a

14. Amazon's moves are largely motivated by: a. customer focus. b. cost cutting. c. the focus on making immediate supplier payments. d. internal leadership. e. technology advancements.

a

3. The fast food restaurant Chipotle pulled its app from Apple's app store when customer demand caused the firm's servers to crash. Which Amazon product could have provided Chipotle's technology staff with the computing resources needed to handle the massive, unprecedented demand? a. AWS b. The Kindle app store c. Simple Storage Solution d. BlueOrigin e. Azure

a

3. Which of the following is an example of agency pricing? a. A department store gets a cut on the selling price of a product, which is set by the product's manufacturer. b. A retail store purchases merchandise from a manufacturer and sells the merchandise at whatever prices it wishes to charge. c. The government of a country sets the minimum price for certain agricultural products to cover the costs incurred by the farmers. d. A manufacturer and a retailer work in a collaborative manner to decide the price of the final product. e. The government of a country sets the maximum price for a certain product that retailers cannot exceed.

a

5. Money owed for products and services purchased on credit to be paid at a later date is known as _____. a. accounts payable b. net profit c. pre-paid expense d. gross profit e. earnings before depreciation and tax

a

7. Firms that can't generate cash quickly enough are referred to as having _____. a. liquidity problems b. sagging problems c. high inventory turns d. stock-outs e. vertical integration problems

a

2. Identify the true statement. a. Agency pricing is illegal. b. Rivals colluding to set prices is illegal. c. Wholesale pricing is illegal. d. In agency pricing, the seller pays publishers for titles and then sells those titles at whatever price it wished. e. Wholesale pricing is also known as agency pricing.

b

2. Which of the following strategies was followed by Amazon's founder? a. He focused more on Amazon's quarterly results. b. He postponed profit harvesting. c. He reduced warehousing capacity. d. He consciously ignored cloud computing platforms. e. He built e-commerce operations only for Amazon's customers in the United States.

b

5. Why would a customer choose the Amazon Workspaces product? a. They are good for firms seeking an alternative to expensive end-user software such as Microsoft Word and Adobe Photoshop. b. They are good choices for clients that want securely locked down PCs. c. They are helpful in bringing the efficiency Amazon developed in the layout of offices at its headquarters to other office environments. d. They are effective as a collaborative, team platform for co-creating professional documents. e. They allow third-party sellers to use Amazon's expertise for warehousing and shipping products.

b

6. The firm's period between paying suppliers for products and collecting funds from customers who purchase these products is referred to as the _____. a. earnings cycle b. cash conversion cycle c. inventory turnover cycle d. liquidity period cycle e. trade cycle

b

15. _____ is a randomized group of experiments used to collect data and compare performance among two options studied. a. Bucket testing b. Multivariate testing c. A/B testing d. Choice modelling e. Web usability testing

c

2. Which of the following is true of Amazon? a. Amazon's early warehousing was a model of efficiency and was critical to the firm being profitable from the start. b. Amazon is the last place most consumers shop online. c. The three pillars of Amazon's business are large selection, convenience, and lower prices. d. Amazon, only recently has started selling directly to customers. e. Amazon concentrates on niche customers, low brand assortment, and higher prices to gain competitive advantage.

c

3. Which of the following is true of Amazon? a. Amazon made profits from the first year of its operation. b. It has limited its products to only electronic devices. c. Its cloud computing business is one of the largest players in that category. d. Its profitability has remained constant over the years and analysts continue to predict profits for the firm's future. e. Amazon concentrates more on its quarterly results and is inflexible on details about its vision.

c

1. Which of the following is true of the Kindle? a. An individual, who owns a Kindle, cannot purchase books provided by non-Amazon publishers. b. The Kindle is only about digitally reading books and not about linking customers to other physical products offered by Amazon. c. By the holiday season of the product's second year, the number of Kindles sold began to decline steadily. d. Amazon doesn't look to make money directly from Kindle hardware sales. e. Amazon today sells fewer electronic books overall than their print counterparts.

d

16. What is the purpose of Amazon Dash? a. To speed items throughout Amazon's warehouse. b. To rapidly restock Amazon's fulfillment center shelves. c. To speed delivery to consumers using drones. d. To allow consumers to rapidly place orders with Amazon. e. To deliver products using autonomous, driverless cars.

d

4. Which of the following is true of Amazon's warehousing process? a. Autonomous robots are in charge of building an order from a warehouse's inventory without any human intervention. b. Amazon's items that produce the most sales volume are stocked on shelves, alphabetically, to speed selection and packing. c. Amazon's systems stamp names and addresses on boxes so they can be filled by pickers directly from shelves. d. When stacking shelves in its warehouses, Amazon ensures that no two similar products sit next to each other. e. Amazon's items that are heavily discounted and about to be written off as 'unsellable inventory' are dropped in an area called 'mass land' in one last-ditch effort to move under-performing warehouse stock.

d

8. Which of the following is the most liquid asset? a. Plant machinery b. Retail locations c. Goodwill d. Cash e. Office furniture

d

1. Which of the following is true of Amazon Web Services (AWS)? a. It only allows firms and not individual customers to rent industrial-strength computing capacity. b. It does not offer corporate-quality computing as a service. c. It doesn't provide services such as programming environments. d. It is a fool-proof system. e. It is just a single-digit percentage of Amazon's overall revenue.

e

10. The phrase inventory turns refers to: a. the stock of inventory returned to a manufacturer due to poor quality. b. also known as gross-profit margin turnover. c. the number of times an inventory item moves within a warehouse. d. the time it takes a product to be replaced by a newer model or upgraded product. e. the number of times inventory is sold or used during a specific period.

e

13. What advantage does Amazon get by creating its own branded products? a. Allows the firm to cut out some of the costs that would otherwise go to a branded supplier. b. Gives Amazon even more negotiating leverage with suppliers. c. Allows Amazon products revealed on site and in the firm's product search results to eliminate costly advertising and other awareness-building spending that many rival products invest in. d. Reduces reliance on well-known suppliers that otherwise sell commodity products. e. All of the above

e

2. Amazon Web Services (AWS): a. was introduced after rival efforts from leading computing giants Microsoft and Google. b. forms a majority percentage of Amazon's overall revenue. c. doesn't provide services such as programming environments. d. is a fool-proof system. e. offer several advantages, including increased scalability, reliability, and security.

e

3. Allowing third-party sellers to list their products on Amazon is controversial. Why would Amazon allow products sold by others to appear on its site? a. Selection attracts consumers. b. A network effect competitive advantage is created where more buyers attract more sellers, giving Amazon an advantage over any rival attempting to create a similar marketplace. c. Although products are sold by third parties, Amazon gains valuable data on things such as customer browsing habits and sales. d. Amazon's brand is reinforced as a first-choice shopping destination. e. All of the above.

e

4. Which of the following is not a firm that has received an investment from Jeff Bezos? a. Uber b. Twitter c. BlueOrigin d. The Washington Post e. Bezos has invested in all of the above businesses.

e

9. Which of the following statements is true? a. The concept of accounts payable is applicable only when a customer buys from a retailer. b. The Amazon Associates program is the second largest affiliate marketing program in the world. c. Amazon does not allow third-party sellers to sell products through its website. d. Amazon has always sold products to customers using middlemen. e. It is not uncommon for a big retailer like Amazon to be able to hold products for a month or longer without having to pay for them.

e

1. In order to ensure security, Amazon Web Services allows only pre-approved, technically sophisticated firms to rent the firm's industrial-strength computing capacity on an as-needed basis.

false

10. U.S. Courts have ruled that it is illegal for Apple to charge app developers a 30 percent fee for digital products sold through apps.

false

11. Amazon will not have to worry about government antitrust concerns in eBook publishing since there are so many real-world bookstores, both chains and independents.

false

12. Amazon Echo refers to Amazon's audiobook division, an especially lucrative business because of the company's text-to-speech expertise.

false

2. Amazon Web Services came out of Amazon's desire to make money from the firm's excess computing capacity.

false

2. Amazon got its start selling games online.

false

3. Amazon does not open its website up to third-party sellers

false

3. Amazon today sells fewer electronic books overall than their print counterparts.

false

3. Amazon's success strategy is based on the focus on its quarterly results. False; Easy

false

4. Amazon PrimeAir is the name of Jeff Bezos' commercial rocketry and aviation firm.

false

4. If an author uses Amazon as a publisher, his titles will only be available through Kindle.

false

5. Tech-fueled operations cannot yield greater profits than off-line players

false

5. The use of Kiva robots has also allowed Amazon to radically reduce headcount, saving the firm additional money by cutting its workforce.

false

6. Accounts payable periods do not vary.

false

6. One of the reasons Amazon has struggled to achieve profitability is because the firm has a negative cash conversion cycle.

false

7. Amazon owns the inventory that third-party sellers provide via the 'Fulfillment by Amazon' service

false

17. A(n) _____ is a line of identifying text, assigned and retrieved by a given web server, and stored by your browser. f. domain g. session bean h. header i. cookie j. URL

i

1. Amazon's Kindle and Fire businesses are meant to create a channel for media sales as that segment rapidly shifts from atoms to bits.

true

1. The three pillars of Amazon's business are large selection, convenience, and lower prices.

true

2. Amazon went seven whole years without turning a profit

true

2. Amazon's Kindle is described as an e-reader, but these devices are also effectively storefronts, directly linking consumers to purchase opportunities for Amazon products..

true

4. AWS is acting as an entrepreneurship catalyst, enabling startups to host and scale their efforts without the added cost associated with buying and maintaining large quantities of computing hardware.

true

4. In order to automate profit-pushing hyper-efficiency, Amazon warehouses are powered by at least as much code as the firm's website.

true

5. Amazon shelves are specifically stocked so that similar items are not placed next to each other.

true

5. Amazon's digital publishing ambitions have extended beyond the printed word to include video content and video games.

true

6. Amazon, as a company, is susceptible to channel conflicts, but less so if it can deliver suppliers a greater revenue than all other channels combined.

true

7. Amazon has significantly changed the cost-structure of the publishing industry.

true

7. While so many managers focus on what's changing in tech-fueled industries, Bezos feels that building strategy based on factors that are NOT going to change is critically important.

true

8. By allowing third parties to make products available through Amazon, the firm strengthens network effects for competitive advantage.

true

9. The Amazon Prime service provides consumers with unlimited two-day shipping and ultimately encourages more purchases from the site, and reinforces Amazon as a first-choice shopping destination for Prime members.

true