Chapter 3: Business Models and Strategies
MULTIPLE CHOICE
1. ________ is an important element of any business model.
a.
Value proposition
b.
Competitive analysis
c.
Financial forecasting
2. A business model is:
a.
how a company makes money.
b.
how a not-for-profit achieves its revenue goals.
c.
both the above.
3. Music file sharing is an example of which Internet business model?
a.
Brokerage
b.
Peer-to-peer
c.
Community
4. ________ is making recommendations to visitors based on preferences generated by the
purchases of similar visitors.
a.
Collaborative filtering
b.
Collaboration
c.
Co-creation
5. Disintermediation means:
a.
Syndication
b.
Eliminate the middleman
c.
Direct Selling
6. ________ is the business model used to describe a site that resells large amounts of content on the
web.
a.
Portal
b.
Machine-to-Machine
c.
Infomediary
7. Among the functions filled by business models are:
a.
to conduct a detailed SWOT analysis.
b.
to describe the value proposition.
c.
to provide detailed pro forma financial statements.
8. Which of the following is not an element to be considered when preparing an Internet business
model?
a.
How value will be created for customers.
b.
How customers will use the product or service.
c.
The importance of multiple revenue streams.
9. Elements of a value proposition do not include:
a.
a description of the capabilities of the business.
b.
a description of customer service strategy.
c.
a description of the target customer.
10. Revenue models for online businesses include:
a.
Bringing buyers and sellers together.
b.
Reaching buyers directly.
c.
both of the above.
11. Which of the following is a true statement about Internet business models?
a.
The business models for B2C and B2B markets are different.
b.
The best business models are supported by advertising.
c.
Nonprofit organizations and governmental agencies make use of a variety of business
models.
12. Examples of the infomediary business model include:
a.
Amazon.
b.
Yahoo!.
c.
Wall Street Journal Online.
13. ________ is making recommendations to visitors based on preferences provided by similar
visitors.
a.
Co-creation
b.
Collaboration
c.
Collaborative filtering
14. Companies share information within the organization on:
a.
extranets.
b.
intranets.
c.
open source networks.
15. The ________ manages and distributes data on the Internet.
a.
portal
b.
disintermediator
c.
infomediary
16. One of the most famous examples of the brokerage model:
a.
Dell.
b.
Yahoo!.
c.
eBay.
17. Which of the following is a type of business marketplace?
a.
Consortium
b.
Private exchange
c.
Both the above
18. Which of the following is an example of the utility model?
a.
Skype
b.
Slashdot
c.
Both of the above
19. Possible applications of the Community model include:
a.
fundraising.
b.
open collaboration.
c.
both of the above.
20. The main function of a portal is to:
a.
provide a huge amount of content.
b.
provide access to the Internet.
c.
provide free services.
21. A statistical technique to identify underlying patterns in data:
a.
provide a huge amount of content.
b.
predictive modeling.
c.
aggregation.
22. A company selling shoes online to consumers is following which business model?
a.
Merchant
b.
Brokerage
c.
Aggregation
23. Selling software-based services on the Internet is an example of which type of model?
a.
Merchant
b.
Brokerage
c.
Manufacturer
24. RSS feeds are:
a.
a method of generating revenue from website content.
b.
a method of syndicating content.
c.
used by large corporations to transmit information over the Internet.
25. The advertising model is an extension of which traditional model?
a.
Media Broadcast
b.
Banner Advertising
c.
Marketplace
26. eToys illustrates the following concept:
a.
Internet firms often have large initial investments in technology and order fulfillment
facilities.
b.
the importance of various cost elements does not vary greatly from offline to online
businesses.
c.
for the customer, costs of switching from one supplier to another are high.
27. The key function of the affiliate model is to:
a.
manage and distribute software-based services and solutions.
b.
provide financial incentives to partners.
c.
share revenue through banner ads.
TRUE/FALSE
1. The value proposition concept only applies to online banking.
2. A business model describes how the enterprise creates value for customers and generates revenue.
3. Business model and business plan are synonymous terms.
4. A value proposition describes the value created for all customers who purchase this type of
product.
5. When creating their business model Internet marketers must choose a single, specific revenue
model.
6. Business models in the B2C space are entirely different from business models in the B2B space.
7. Advertising is the only feasible revenue stream for most Internet businesses.
8. Affiliate programs are worthwhile but expensive for marketers to operate.
9. Application Service Providers (ASPs) provide software applications and services to small
companies.
10. Infomediaries are present only in the B2C marketspace.
11. With the demise of Napster the Peer-to-Peer application is no longer viable.
12. The advertising model is an excellent way for a new business to consider making money.
13. Ecommerce is not applicable to nonprofit markets:
14. The subscription model is not applicable to nonprofit markets:
15. A proprietary system is usually not sold or licensed.
ESSAY
1. In your own words describe the functions of a business model and explain why the concept is
important.
2. The text discussed several business models that are important in the B2C space. Choose one of
the models. Describe in detail the characteristics of that model and provide an example of it, preferably an
example different from those used in the text. Be sure to explain how and why your example illustrates
that particular business model.
3. The value proposition is an important marketing concept. Explain the concept and give an
example of how an Internet business creates value for customers.