Management Science 590 - Chapter 09

Personal consumption of retail goods and services accounts for over 75% of total gross domestic product.

False

The ________ are its unique skills that cannot be easily duplicated.

core competencies of a firm

What should be examined to determine if the firm has taken into account consumer trust issues such as the privacy and security of personal information and if the firm may be vulnerable to legal challenges?

the social and legal challenges facing the firm

All of the following are challenges faced by bricks-and-clicks firms except: coordinating prices across channels. handling returns of Web purchases at retail outlets. building a credible Web site. building a brand name.

building a brand name

All of the following are advantages of online retail except: lower supply chain costs. lower cost of distribution. ability to change prices. faster delivery of goods.

faster delivery of goods

The financial factors to analyze are the firm's:

revenues, cost of sales, gross margin, operating expenses, operating margin, and net margin.

All of the following statements about Amazon are true except: Amazon showed a profit in 2014. Amazon Web Services is now a major part of Amazon's business. eBay can be considered a competitor of Amazon's. Amazon continues to generate revenue primarily by selling products.

Amazon showed a profit in 2014

All of the following statements about the MOTO sector are true except: Compared to general merchandisers, the transition to e-commerce has been easier for MOTO firms. The MOTO sector is also referred to as the specialty store sector. MOTO was the last technological revolution that preceded e-commerce. Distribution of catalogs is one of MOTO retailers' biggest expenses.

The MOTO sector is also referred to as the specialty store sector.

The belief was that the Internet would greatly reduce both search costs and transaction costs, causing consumers to use the Internet to find the lowest prices for products.

True

Virtual merchants face potentially large costs for all of the following except: building and maintaining a Web site. building and maintaining physical stores. building an order fulfillment infrastructure. developing a brand name.

building and maintaining physical stores.

All of the following are challenges for catalog merchants except: high costs of printing and mailing. building a credible Web site. the need to bring staff in or manage new technology. building sophisticated order entry and fulfillment systems.

building sophisticated order entry and fulfillment systems

Which of the following is not one of the seven major segments of the retail industry? electronics and computers specialty stores gasoline and fuel food and beverage

electronics and computers

The ________ must be evaluated to determine if the firm has adopted business systems that will enable it to operate at peak efficiency and whether there are any looming technological changes that might force the firm to change its processes or methods.

firm value chain

All of the following are examples of the challenges that traditional manufacturers experience when using the Internet to sell directly to the consumer except: moving to a demand-pull model. high cost structures. developing a fast-response online order and fulfillment system. channel conflict.

high cost structures

The ________ must be evaluated to determine if the chain of production and distribution for the industry is changing in ways that will benefit or harm the firm.

industry value chain

Which of the following is an on-demand service company focused on lodging? Uber Lyft Airbnb Task Rabbit

Airbnb

Which of the following is not an example of a virtual merchant? Overstock Wayfair Rue La La Dell

Dell

Which of the following is not a major trend in the online recruitment services industry? Disintermediation Millennials and GenX primarily use mobile devices to search for jobs Social recruiting Hiring by algorithm

Disintermediation

Describe the vision of online retailing during the early days of e-commerce.

Entrepreneurial online retailers saw the Web as one of the largest market opportunities in the United States economy. They believed that entering the online retail market would be an easy proposition because the new marketing channel would revolutionize the retail industry.

How many retailers generate approximately 90% of all retail e-commerce sales?

1,000

In 2015, approximately what percentage of Internet users over the age of 14 made a purchase at an online retail store?

75%

Approximately ________ % of the United States labor force is involved in providing services.

80

In the United States, the service sector accounts for approximately ________ % of the United States GDP.

80

Which of the following is not true about on-demand service firms? The growth of on-demand service firms is supported by the use of online reputation systems based on peer review. It is not likely that on-demand service firms will totally escape government regulation. On-demand service firms facilitate access to resources. On-demand service firms are a totally new phenomenon without precedent in the history of e-commerce.

On-demand service firms are a totally new phenomenon without precedent in the history of e-commerce.

Which of these job recruitment sites is not a job listing aggregator? Indeed SimplyHired Glassdoor CareerBuilder

SimplyHired

What factors are involved in assessing a firm's economic viability?

Strategic and Financial assessments are conducted.

All of the following were factors that precipitated the growth of MOTO except: The national toll-free call system. The growth of the cellular phone industry. Falling long distance telecommunications prices. The growth of the credit card industry.

The growth of the cellular phone industry.

Is a subscription-based retailer using predictive marketing and Big Data:

Birchbox

What would happen when consumers use the Internet to find the lowest prices for products?

Consumers would be increasingly drawn to the new channel, and only the low-cost, high-service quality e-tailers would survive.

About 90% of Internet users in the United States are now online buyers.

False

Consumers are primarily price-driven when shopping on the Internet.

False

Contrary to predictions of analysts made during the early days of e-commerce, the Internet has led to both disintermediation and hypermediation on a widespread basis.

False

What is the state of the online retail sector today?

It is one of the smallest segments of the total retail market but is growing faster than its offline counterparts. During the recession, online retail revenues were basically flat but they since have resumed their upward trajectory.

Why are online career services are so well suited to the Web?

Job-hunting services have been one of the Internet's most successful online services because they save money for both job hunters and employers. Job resumes can be posted for free, many other career-related services can be easily accessed, and for a fee, job hunters can access lists of job openings that have been posted by companies.

Which of the following statements is not true about the automobile and automobile parts and accessories online retail category? Most of the revenue in this category is generated from the sales of automobiles. Automobile manufacturers use the Internet to deliver branding advertising. U.S. franchising law prohibits automobile manufacturers from selling cars directly to consumers. Automobile retailing is dominated by dealership networks.

Most of the revenue in this category is generated from the sales of automobiles.

Expedia owns all of the following except: Travelocity. Orbitz. TripAdvisor. CheapTickets

TripAdvisor

Almost all recruiting professionals now use social networks in the recruiting process.

True

Big Data plays an important role in predictive marketing.

True

In 2015, the number of online buyers was over 170 million.

True

More than 50% of the adult U.S. population use online banking.

True

Naturebox is an example of a subscription-based retail revenue model.

True

On-demand service companies collect a fee from both sellers and buyers who use the platform.

True

The existence of substitute products is a key industry strategic factor.

True

Which of the following has introduced a tool known as Consumer Alerts to inform readers when a review is likely to be fraudulent? Yelp TripAdvisor Angie's List TripExpert

Yelp

In ________, all of a customer's financial (and even nonfinancial) data are pulled together at a single personalized Web site.

account aggregation

What are the major features of the online service industry?

automobile, life, health, and property and casualty

Provides a financial snapshot of a company's assets and liabilities (debts) on a given date:

balance sheet

Occurs when retailers of products must compete on price and currency of inventory directly against the manufacturer:

channel conflict

What is another name for pro forma earnings?

earnings before income taxes, depreciation, and amortization (EBITDA)

Refers to the ability of firms to survive during a specified time period as profitable business firms:

economic viability

All of the following services require extensive personalization except: financial services. legal services. medical services. accounting services.

financial services

The nature of the ________ must be evaluated to determine if the competition within the industry is based on differentiated products and services, price, the scope of the offerings or the focus of the offerings, and whether any imminent changes in the nature of the competition will benefit or harm the firm.

intra-industry competition

Which of the following would not be considered a current asset? long-term investments cash accounts receivable marketable securities

long-term investments

The term supply-push refers to:

making products prior to orders being received based on estimated demand.

Measures the percentage of sales revenue a firm is able to retain after all expenses are deducted from gross revenues:

net margin

All of the following are terms used to describe on-demand service companies except: mesh economy. collaborative commerce. we-commerce. omni-channel commerce.

omni-channel commerce

Which of the following has the second-highest share of online retail sales? omni-channel merchants virtual merchants catalog merchants manufacturer-direct

omni-channel merchants

Current liabilities are debts of the firm that will be due within:

one year

The MOTO sector of the retail industry is most similar to the ________ sector.

online retail sales

Which of the following is not one of the methods used by traditional retailers to develop omni-channel integration? online Web catalog online order, in-store pickup online supply-push online promotions for offline purchases

online supply-push

Operating margin is defined as:

operating income or loss divided by net sales revenues

All of the following are strategic factors that pertain specifically to a firm and its related businesses except: core competencies. synergies. technology. power of customers.

power of customers

Craigslist is a player in which of the following online services markets? real estate services and career services insurance services and brokerage services travel services online accounting services

real estate services and career services

The existence of ________ in an industry can also drive prices down if consumers have access to products with a similar function that they determine will fill their needs just as adequately.

substitute products

Which of the following is not a key industry strategic factor? synergies barriers to entry industry value chain existence of substitute products

synergies

________ refer to the availability to the firm of the competencies and assets of related firms that it owns or with which it has formed strategic partnerships.

synergies

The Internet has resulted in lower search costs, increased price comparison, and lower prices to consumers for which insurance product line?

term life insurance

Which of the following is not categorized as an operating expense? the cost of products being sold marketing costs administrative overhead amortization of goodwill

the cost of products being sold

What must be evaluated to determine if it has proprietary technologies that will allow it to scale with demand and if it has developed the customer relationship, fulfillment, supply chain management, and human resources systems that it will need in order to be viable?

the firm's current technology

Strategic approaches to economic viability focus on:

the industry in which a firm operates and the firm itself.

Which of the following has the highest share of online retail sales? omni-channel merchants virtual merchants catalog merchants manufacturer-direct

virtual merchants

For a quick check of a firm's short-term financial health, examine its:

working capital

The major impact of Internet real estate sites is in influencing offline decisions.

False

The online mortgage industry has transformed the process of obtaining a mortgage.

False

Which of the following is not one of the central challenges facing the online retail industry? Lack of physical store presence Consumer concerns about the privacy of personal information Inconvenience in returning goods Delivery delays

Lack of physical store presence

All of the following have launched trials of Buy buttons except: Facebook. Pinterest. Twitter. Tumblr.

Tumblr

Which of the following is not an example of a transaction broker? a stockbroker a real estate agent an accountant an employment agency

an accountant

What are the industry factors to examine when using a strategic approach?

barriers to entry and intellectual property

The strategic factors for the individual firm that are examined include:

the firm value chain, the core competencies of the firm, the synergies available to the firm, the technology used by the firm, and the social and legal challenges facing the firm.

What challenges do Virtual Merchants face?

They must build a business and brand name from scratch quickly, and face many virtual merchant competitors. Large costs in building and maintaining an e-commerce presence, building an order fulfillment infrastructure, and developing a brand name. Must achieve highly efficient operations in order to preserve a profit, while building a brand name as quickly as possible in order to attract sufficient customers to cover their costs of operations. Adopt low-cost and convenience strategies, coupled with extremely effective and efficient fulfillment processes to ensure customers receive what they ordered as fast as possible.

Which of the following categories generates the highest percentage of online retail revenue? computers and electronics apparel and accessories. books/music/video automobile and automobile parts and accessories

apparel and accessories

Omni-channel merchants are also referred to as:

bricks-and-clicks companies

The lower the ________ compared to revenue, the higher the gross profit.

cost of sales

Are single-channel e-commerce firms that generate almost all their revenue from online sales:

virtual merchants

What are the challenges faced by automobile manufacturers in selling online?

U.S. franchising law prohibits automobile manufacturers from selling cars directly to consumers. Direct online automobile sales are currently not common due to the complexity of the vehicle purchasing process.

Which of the following had the highest online sales revenue in 2014? Macy's Walmart Sears Target

Walmart

The Internet has dramatically changed the insurance industry's value chain.

False

Is the largest sector of the online travel services market in terms of revenue:

airline reservations

Gross margin is defined as gross profit: minus total operating expenses. divided by net sales revenues. divided by cost of sales. minus net income.

divided by net sales revenues

Service industry groups are categorized generally into two groups, those that provide transaction brokering and those that involve:

providing hands-on services

Online travel services is one of the few sectors in which extensive disintermediation has occurred.

False

The Internet and e-commerce have created significant disintermediation in the real estate marketplace.

False

Which of the following best explains why the service sector is a natural avenue for e-commerce? The service sector is less geographically reliant and more globally oriented. The service sector has historically been more technology-reliant. Much of the value in services is based on the collection, storage, and exchange of information. It is not; services are difficult to translate to e-commerce because they rely on face-to-face communication and barter.

Much of the value in services is based on the collection, storage, and exchange of information.

All of the following were parts of the vision during the early days of e-commerce except the belief that: New, "first-mover" middlemen, with expertise in e-commerce, would force traditional intermediaries out of business. Web consumers were rational and cost-driven. Entry costs to the online retail market would be much less than those needed to establish a physical storefront. The cost of acquiring customers would be much lower.

New, "first-mover" middlemen, with expertise in e-commerce, would force traditional intermediaries out of business.

Lunchtime purchases are the fastest growing time segment for online retail purchases is a major trend in online retail for 2015 - 2016.

False

More people use a tablet for mobile banking than a mobile phone.

False

Online retail constitutes about 20% of the total retail market today.

False