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This Document Contains Chapters 13 to 14 Chapter 13 Creating Innovative Organizations Multiple Choice Questions 1. Which of the following terms implies that organizations that cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction? A. Collective intelligence B. Digital Darwinism C. Joint venture D. Sole proprietorship Answer: B. Digital Darwinism Rationale: Digital Darwinism implies that organizations that cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction. 2. Which of the following produces an improved product customers are eager to buy, such as a faster car or larger hard drive? A. Sustaining technology B. Disruptive technology C. Reputation system D. Personalization Answer: A. Sustaining technology Rationale: Sustaining technology produces an improved product customers are eager to buy, such as a faster car or larger hard drive. 3. Which of the following represents a form of disruptive technology? A. Enters the marketplace at the low end. B. Is a new way of doing things that initially does not meet the needs of existing customers. C. Tends to open new markets and destroy old ones. D. All of these are included. Answer: D. All of these are included. Rationale: Disruptive technology (1) is a new way of doing things that initially doesn't meet the needs of existing customers, (2) tends to open new markets and destroy old ones, and (3) enters the marketplace at the low end and eventually evolves to displace high-end competitors and their reigning technologies. 4. Which of the following is a challenge of sustaining technology? A. Provides a cheaper product for current customers. B. Provides a product that does not meet existing customers' future needs. C. Provides a better product for current customers. D. Provides a faster product for current customers. Answer: B. Provides a product that does not meet existing customers' future needs. Rationale: Sustaining technology produces an improved product customers are eager to buy, such as a faster car or larger hard drive. Sustaining technologies tend to provide us with better, faster, and cheaper products in established markets. 5. Which of the following is not included in the top five companies that are expecting future growth to be generated from new investments? A. Johnson & Johnson B. Sears C. Dell D. None of these Answer: B. Sears Rationale: The top five companies expecting future growth from new investments are (1) Dell, (2) Johnson and Johnson, (3) Proctor and Gamble, (4) Walmart, and (5) Cisco. 6. The Innovator's Dilemma suggests that established companies can take advantage of ___________ without hindering existing relationships with customers, partners, and stakeholders. A. Sustaining technology B. Existing investments C. Collective intelligence D. Disruptive technology Answer: D. Disruptive technology Rationale: The book "The Innovator's Dilemma" discusses how established companies can take advantage of disruptive technologies without hindering existing relationships with customers, partners, and stakeholders. 7. Which of the following began as an essential emergency military communications system operated by the U.S. Department of Defense (DARPA)? A. Internet B. Ecommerce C. Ebusiness D. World Wide Web Answer: A. Internet Rationale: Originally, the Internet was essentially an emergency military communications system operated by the U.S. Department of Defense (DARPA). 8. Which of the following terms could you use synonymously when referring to the web? A. Network, paradigm shift B. URL, domain name C. HTML, Internet D. Web browser, blog Answer: B. URL, domain name Rationale: When referring to the web, a URL (Universal Resource Locator) and a domain name mean the same thing or are the most interchangeable. 9. At a local marketing firm, Steve is the lead web developer and is responsible for working with customers on their web designs, development, and graphics. Which of the following would be a critical skill Steve must have to be able to perform his job? A. Understanding that he must create a unique domain name for each client. B. Being able to work with HTML. C. Understanding the World Wide Web and how hyperlinks work. D. All of these. Answer: D. All of these. Rationale: At a local marketing firm, Steve is the lead web developer. Among his responsibilities are working with customers, web design and development, and graphic design techniques. More than likely, he will be required to utilize URLs, domain names, HTML, World Wide Web knowledge, web browsers, and HTTP. 10. Which of the following is not a reason for the explosive growth of the WWW? A. Basic web pages are easy to create and extremely flexible. B. The microcomputer revolution made it possible for an average person to own a computer. C. Digital Darwinism. D. The speed, convenience, and low cost of email. Answer: C. Digital Darwinism. Rationale: Following are some of the reasons for the growth of the World Wide Web. (1) The microcomputer revolution made it possible for an average person to own a computer. (2) Advancements in networking, hardware, software, and media made it possible for business computers to be connected to larger networks at a minimal cost. (3) Browser software gave computer users an easy-to-use interface to download, find, and display web pages. (4) Email is fast, convenient, and cheap. (5) Basic web pages are easy to create and extremely flexible. Digital Darwinism implies that organizations that cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction. 11. Which term describes the WWW during its first few years of operation between 1991 and 2003? A. Web 1.0 B. E-shop C. Open source D. All of these Answer: A. Web 1.0 Rationale: Web 1.0 refers to the World Wide Web during its first few years of operation from 1991-2003. 12. What is the difference between ecommerce and ebusiness? A. Ecommerce includes Internet network effects. Ebusiness includes ecommerce and all activities related to internal and external business operations. B. Ecommerce is buying and selling of goods or service online. Ebusiness includes ecommerce and all activities related to internal and external business operations. C. Ecommerce includes ecommerce and all activities related to internal and external business operations. Ebusiness includes all of the of knowledge management systems. D. Ebusiness is buying and selling of goods or service online. Ecommerce includes ecommerce and all activities related to internal and external business operations. Answer: B. Ecommerce is buying and selling of goods or service online. Ebusiness includes ecommerce and all activities related to internal and external business operations. Rationale: Ecommerce is the buying and selling of goods and services over the Internet and refers only to online transactions. Ebusiness includes ecommerce along with all activities related to internal and external business operations, such as servicing customer accounts, collaborating with partners, and exchanging real-time information. 13. What is the Internet protocol web browsers use to request and display web pages using universal resource locators? A. Hypertext markup language (HTML) B. URL C. Hypertext transport protocol (HTTP) D. DARPA Answer: C. Hypertext transport protocol (HTTP) Rationale: Hypertext transport protocol is the Internet protocol web browsers use to request and display web pages using universal resource locators. 14. What is the practice of buying a domain name and not using the web page but waiting to profit from the trademark? A. Domain or cyber squatting B. Branding domain C. Cybermediation D. Paradigm shift or domain shift Answer: A. Domain or cyber squatting Rationale: Domain squatting or cyber squatting is the practice of buying a domain to profit from a trademarked name. 15. What allows users to access the WWW? A. Web conferencing B. Web browser C. Web 2.0 D. Web business Answer: B. Web browser Rationale: This is the definition of a web browser. 16. Which of the following are types of web browsers? A. Microsoft Word and Excel B. Internet Explorer and Mozilla Firefox C. Facebook and MySpace D. All of these Answer: B. Internet Explorer and Mozilla Firefox Rationale: These are web browsers. 17. What caused Polaroid to go bankrupt? A. It failed to have innovative technology and a captive customer base. B. One-hour film processing and digital cameras stole its market share. C. People who want instant access to their pictures also want a third party involved. D. Internet websites such as Flickr and Facebook stole its market share. Answer: B. One-hour film processing and digital cameras stole its market share. Rationale: Polaroid went bankrupt because one-hour film processing and digital cameras stole its market share. 18. Many social media sites today allow you to customize your web address, for example, www.facebook.com/Womenwithdrive. What is an alternate name for a web address such as www.apple.com? A. Digital bookmark B. Internet bookmark C. Universal resource locator D. Web browser Answer: C. Universal resource locator Rationale: Many social media sites today allow you to customize your web address, for example, www.facebook.com/Womenwithdrive. This address is also called a universal resource locator (URL). 19. Many industries have been forced to change due to technology advances. Which of the below industries has felt the lowest amount of economic impact from ebusiness? A. Auto industry B. Retail industry C. Travel industry D. Waste or recycling industry Answer: D. Waste or recycling industry Rationale: Industries that have been revamped by the disruption of ebusiness include (1) auto, (2) publishing, (3) education and training, (4) entertainment, (5) financial services, (6) retail, and (7) travel. 20. Universities were among some of the first users of the Internet. What was the Internet first called? A. HTML B. ARPANET C. OPT D. WWO Answer: B. ARPANET Rationale: The first name of the internet was ARPANET. 21. Both individuals and organizations have embraced ebusiness to do which of the following: A. Enhance productivity. B. Maximize convenience. C. Improve communication. D. All of these. Answer: D. All of these. Rationale: Both individuals and organizations have embraced ebusiness to enhance productivity, maximize convenience, and improve communications. 22. What is the depth and breadth of details contained in a piece of textual, graphic, audio, or video? A. Information richness B. Information age C. Information reach D. Information browser Answer: A. Information richness Rationale: Information richness refers to the depth and breadth of details contained in a piece of textual, graphic, audio, or video information. 23. What measures the number of people a firm can communicate with all over the world? A. Information richness B. Information age C. Information reach D. Information browser Answer: C. Information reach Rationale: Information reach measures the number of people a firm can communicate with all over the world. 24. Which of the below would not be considered an advantage of ebusiness? A. Expanding global reach. B. Opening new markets. C. Reducing costs. D. Reducing information reach. Answer: D. Reducing information reach. Rationale: Ebusiness advantages include (1) expanding global reach, (2) opening new markets, (3) reducing costs, (4) improving operations, and (5) improving effectiveness. 25. What is the ability of an organization to tailor its products or services to the customers' specifications? A. Personalization B. Long tail C. Mass customization D. Information reach Answer: C. Mass customization Rationale: This is the definition of mass customization. 26. Which of the below would not be considered a company operating in the long tail of a typical sales curve? A. Walmart B. Netflix C. iTunes D. Zappos Answer: A. Walmart Rationale: Niche markets that are excellent examples of long tail sales include Netflix, Amazon, Zappos, and iTunes. 27. M&M's offers people the opportunity to order the candy in special colors or with customized sayings. How would you classify M&M's ebusiness strategy? A. Information richness B. Mass customization C. Personalization D. Interactivity Answer: B. Mass customization Rationale: M and M's offers people the opportunity to order the candy in special colors or with customized sayings, which is an example of mass customization. 28. Amazon creates a unique recommendation listing for each customer that revisits its website. How would you classify Amazon's ebusiness strategy? A. Information richness B. Mass customization C. Personalization D. Interactivity Answer: C. Personalization Rationale: Amazon uses personalization to create unique recommendations for each customer. 29. Netflix creates a unique recommendation listing for each customer that revisits its website. How would you classify Netflix's ebusiness strategy? A. Information richness B. Mass customization C. Personalization D. Interactivity Answer: C. Personalization Rationale: Netflix uses personalization to create unique recommendations for each customer. 30. Nike offers people the opportunity to visit its website to create running shoes in the style and color they choose. How would you classify Nike's ebusiness strategy? A. Information richness B. Mass customization C. Personalization D. Interactivity Answer: B. Mass customization Rationale: Nike's customized shoes are an example of mass customization. 31. What uses the Internet to reassemble buyers, sellers, and other partners in a traditional supply chain in new ways? A. Content providers B. Intermediaries C. Reintermediation D. Cybermediation Answer: C. Reintermediation Rationale: This is the definition of reintermediation. 32. When evaluating the business value of disintermediation, the more ____________ that are cut from the distribution chain, the lower the product price. A. Technologies B. Customers C. Data streams D. Intermediaries Answer: D. Intermediaries Rationale: When evaluating the business value of disintermediation, the more intermediaries that are cut from the distribution chain, the lower the product price. 33. What type of mediation refers to the creation of new kinds of intermediaries that simply could not have existed before the advent of ebusiness? A. Cybermediation B. Interactivity C. Reintermediation D. Disintermediation Answer: A. Cybermediation Rationale: Cybermediation refers to the creation of new kinds of intermediaries that simply could not have existed before the advent of ebusiness. 34. A company can reduce its costs by using ebusiness to change its business processes. Which of the following does not represent an example of how a company can reduce its costs through ebusiness? A. Creating an online travel reservation. B. Ordering a product online. C. Researching products to find the lowest price and visiting the store to purchase the item. D. All of these. Answer: C. Researching products to find the lowest price and visiting the store to purchase the item. Rationale: These are some examples that demonstrate how a company can reduce costs by changing some of their business processes and utilizing ebusiness: (1) air travel reservations done online instead of over the phone and (2) the online ordering process of a product. Researching cost savings online does not help the company; it only helps the customer. 35. Which of the below statements is correct? A. Just putting up a website can create tremendous ebusiness value. B. Just putting up a website can create tremendous business buzz. C. Just putting up a website can limit product availability. D. Just putting up a website does not create an ebusiness. Answer: D. Just putting up a website does not create an ebusiness. Rationale: Just putting up a website doesn't create an ebusiness. The website must also create buzz, be innovative, add value, and provide useful information. They must build a sense of community and collaboration. 36. What is the exact pattern of a consumer's navigation through a site? A. Web browsing B. Hypertext C. Clickstream data D. Web data Answer: C. Clickstream data Rationale: This is the definition of clickstream data. 37. What is the best way to measure a company's ebusiness success? A. Effective MIS metrics B. Interactivity C. Clickstream data D. All of these Answer: D. All of these Rationale: The best way to measure a company's ebusiness success is by using different effective MIS metrics, such as interactivity and clickstream data. 38. Which of the following is an ebusiness marketing technique? A. Cookies B. Pop-up ad C. Banner ad D. All of these Answer: D. All of these Rationale: Ways of marketing through ebusiness include (1) an associate program, (2) banner ads, (3) click-through, (4) cookies, (5) pop-up ads, and (6) viral marketing. 39. Which type of ebusiness marketing technique induces websites or users to pass on a marketing message to other websites or users, creating exponential growth in the message's visibility and effect? A. Cookies B. Click-through C. Viral marketing D. Pop-up ad Answer: C. Viral marketing Rationale: Viral marketing is a marketing technique that induces websites or users to pass on a marketing message to other websites or users, creating exponential growth in the message's visibility and effect. 40. Bonnie Flat is a real estate agent who specializes in the luxury home market in the Seattle, Washington, area. Bonnie is highly technical and uses many online marketing techniques to increase business. One of most successful online marketing techniques is to place a box along the top of real estate websites and luxury custom furniture websites. What type of marketing technique is Bonnie using? A. A cookie B. A banner ad C. A pop-up ad D. A click-through ad Answer: B. A banner ad Rationale: A banner ad is a box running across a website that advertises the products and services of another business, usually another ebusiness. The banner often contains a link to the advertiser's website. 41. What is the business strategy that lets a company shorten the order process and add value with reduced costs or a more responsive and efficient service, and occurs when a business sells directly to the customer online? A. Disintermediation B. Intermediaries C. Cybermediation D. None of these Answer: A. Disintermediation Rationale: This is the definition of disintermediation. 42. What measures the number of people a firm can communicate with all over the world? A. Information B. Mass communication C. Information reach D. Cybertronics Answer: C. Information reach Rationale: This is the definition of information reach. 43. Which of the following is an example of a clickstream data metric? A. Dates and times of visits B. Number of customers with shopping carts C. The number of page views D. All of these Answer: D. All of these Rationale: Examples of clickstream data metrics include (1) number of page views, (2) pattern of websites visited, including most frequent exit page and prior website, (3) length of stay on the website, (4) dates and times of visits, (5) number of registrations filled out per 100 visitors, (6) number of abandoned registrations, (7) demographics of registered visitors, (8) number of customers with shopping carts, and (9) number of abandoned shopping carts. 44. What does digital Darwinism imply? A. Organizations that can adapt to the new demands placed on them for surviving in the information age are doomed to extinction. B. Organizations that cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction. C. Organizations that can adapt to new information systems are doomed to extinction. D. Organizations that cannot adapt to new information systems are doomed to exile. Answer: B. Organizations that cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction. Rationale: This is the definition of digital Darwinism. 45. Which of the following is an example of a disruptive technology? A. Oracle's database software B. Sony's transistor-based consumer electronics (transistor radio) C. Intel's low-end microprocessor D. All of these Answer: D. All of these Rationale: All of these are examples of disruptive technologies, as displayed in the figure about companies that capitalized on disruptive technology. 46. Which of the following is an example of a sustaining technology? A. Porsche's faster car B. Intel's low-end microprocessor C. Sony's transistor-based consumer electronics (transistor radio) D. All of these Answer: A. Porsche's faster car Rationale: Sustaining technologies tend to provide us with better, faster, and cheaper products, such as a faster car or larger hard drive. 47. Which company is expecting to gain the majority of its returns on existing investments? A. Dell B. Johnson & Johnson C. Procter & Gamble D. Phillips Petroleum Answer: D. Phillips Petroleum Rationale: According to the disruptive versus sustaining technology figure, Phillips Petroleum is expecting returns on existing investments to equal 97 percent of its total. 48. Which company is expecting to gain the majority of its returns on new investments? A. General Motors B. Sears Roebuck C. Dell D. Phillips Petroleum Answer: C. Dell Rationale: According to the disruptive versus sustaining technology figure, Dell is expecting to gain the majority of its returns from new investments. 49. Which of the following is a reason for the growth of the World Wide Web? A. The microcomputer revolution. B. Advancements in networking hardware. C. Web pages being easy to create and flexible. D. All of these. Answer: D. All of these. Rationale: All of these are reasons for the growth of the WWW. 50. What is information richness? A. A global public network of computer networks that pass information from one to another using common computer protocols. B. The depth and breadth of details contained in a piece of textual, graphic, audio, or video information. C. The number of people a business can communicate with, on a global basis. D. Occurs when those with access to technology have great advantages over those without access to technology. Answer: B. The depth and breadth of details contained in a piece of textual, graphic, audio, or video information. Rationale: This is the definition of information richness. 51. What is information reach? A. A global public network of computer networks that pass information from one to another using common computer protocols. B. The depth and breadth of information transferred between customers and businesses. C. Measures the number of people a firm can communicate with all over the world. D. Occurs when those with access to technology have great advantages over those without access to technology. Answer: C. Measures the number of people a firm can communicate with all over the world. Rationale: This is the definition of information reach. 52. Which of the following is not one of the Internet's impacts on information? A. Easy to compile B. Improved content C. Digital divide D. Increased richness Answer: C. Digital divide Rationale: The digital divide is not one of the Internet's impacts on information. 53. What are agents, software, or businesses that provide a trading infrastructure to bring buyers and sellers together? A. Intermediaries B. Disintermediaries C. Reintermediaries D. Cybermediation Answer: A. Intermediaries Rationale: This is the definition of intermediaries. 54. What occurs when a business sells directly to the customer online and cuts out the middle man? A. Intermediaries B. Disintermediation C. Reintermediation D. Cybermediation Answer: B. Disintermediation Rationale: This is the definition of disintermediation. 55. What occurs when steps are added to the value chain as new players find ways to add value to the business process? A. Intermediaries B. Disintermediation C. Reintermediation D. Cybermediation Answer: C. Reintermediation Rationale: This is the definition of reintermediation. 56. What refers to the creation of new kinds of intermediaries that simply could not have existed before the advent of ebusiness, including comparison-shopping sites such as Froogle and bank account aggregation services such as Citibank? A. Intermediaries B. Disintermediation C. Reintermediation D. Cybermediation Answer: D. Cybermediation Rationale: This is the definition of cybermeditation. Fill in the Blank Questions 57. Several companies that launched new businesses by capitalizing on disruptive technology were outlined in the book. One example is _______________, which launched such revolutionary products as the iPod and the iPhone. Answer: Apple 58. A __________ technology is a new way of doing things that initially does not meet the needs of existing customers. Answer: Disruptive 59. Computers connected through the __________ can send and receive information, including text, graphics, voice, video, and software. Answer: Internet 60. Through ____________ data, companies can observe the exact pattern of a consumer's navigation through a site. Answer: Clickstream 61. A __________ is an online marketing technique where a website deposits a small file-containing information about the customer and his/her browsing activities-on the customer's hard drive. Answer: Cookie 62. A(n) ___________ technology produces an improved product customers are eager to buy. Answer: Sustaining 63. According to Christensen, companies may have placed too great an emphasis on satisfying customer's ______ needs, while forgetting to adopt new disruptive technology that will meet customer's future needs. Answer: Current 64. The Innovator's ___________ is a book by Clayton M. Christensen. Answer: Dilemma 65. The WWW provides access to Internet information, including text, graphics, audio, and video files, through documents that use a special formatting language called ________ markup language. Answer: Hypertext 66. Information __________ refers to the depth and breadth of details contained in a piece of textual, graphic, audio, or video information. Answer: Richness 67. Information __________ measures the number of people a firm can communicate with all over the world. Answer: Reach True/False Questions 68. Future managers and workers need to understand the benefits MIS and ebusiness can offer a company if it wants to take advantage of sustaining technologies. Answer: False Rationale: Future managers and workers need to understand the benefits MIS and ebusiness can offer a company if it wants to take advantage of disrupting technologies. 69. Examples of ebusiness advantages include opening new markets, reducing costs, and expanding global reach. Answer: True Rationale: Ebusiness advantages include (1) expanding global reach, (2) opening new markets, (3) reducing costs, (4) improving operations, and (5) improving effectiveness. 70. Intermediaries occur when a customer sells directly to another customer online, cutting out the intermediary. Answer: False Rationale: Disintermediation occurs when a business sells direct to the customer online and cuts out the intermediary. 71. Interactivity measures advertising effectiveness by counting visitor interactions with the target ad, including time spent viewing the ad, number of pages viewed, and number of repeat visits to the advertisement. Answer: True Rationale: This is the definition of interactivity. 72. Disruptive technology tends to provide us with better, faster, and cheaper products. Answer: False Rationale: Sustaining technology tends to provide us with better, faster, and cheaper products. 73. Disruptive and new technologies typically cut into the low-end of the marketplace and eventually evolve to displace high-end competitors and their reigning technologies. Answer: True Rationale: Disruptive and new technologies typically cut into the low-end of the marketplace and eventually evolve to displace high-end competitors and their reigning technologies. 74. Dell Inc. ranks highest on the list for expecting returns from new investments. Answer: True Rationale: This is true according to the disruptive versus sustaining technology figure. 75. Information reach refers to the number of people a business can communicate with, on a global basis. Answer: True Rationale: Information reach refers to the number of people a business can communicate with, on a global basis. 76. What is best for an organization's current business could ruin it in the long term. Answer: True Rationale: What is best for an organization's current business could ruin it in the long term. 77. Ebusiness is the buying and selling of goods and services over the Internet. Answer: False Rationale: Ecommerce is the buying and selling of goods and services over the Internet. 78. Ebusiness is something that a business can just go out and buy. Answer: False Rationale: Ebusiness is not something that a business can just go out and buy. Essay Questions 79. Compare disruptive and sustaining technologies, and explain how the Internet and WWW caused business disruption. Answer: Disruptive technologies offer a new way of doing things that initially does not meet the needs of existing customers. Disruptive technologies redefine the competitive playing fields of their respective markets, open new markets, and destroy old ones. They cut into the low end of the marketplace and eventually evolve to displace high-end competitors and their reigning technologies. Sustaining technologies produce improved products customers are eager to buy, such as a faster car or larger hard drive. Sustaining technologies tend to provide us with better, faster, and cheaper products in established markets and virtually never lead in markets opened by new and disruptive technologies. The Internet and WWW caused business disruption by allowing people to communicate and collaborate in ways that were not possible before the information age. The Internet and WWW completely disrupted the way businesses operate, employees communicate, and products are developed and sold. 80. Describe Web 1.0 along with ebusiness and its associated advantages. Answer: Web 1.0 is a term to refer to the World Wide Web during its first few years of operation between 1991 and 2003. Ebusiness includes ecommerce along with all activities related to internal and external business operations, such as servicing customer accounts, collaborating with partners, and exchanging real-time information. During Web 1.0, entrepreneurs began creating the first forms of ebusiness. Ebusiness advantages include expanding global reach, opening new markets, reducing costs, and improving operations and effectiveness. Chapter 14 Ebusiness Multiple Choice Questions 1. What is the difference between a business model and an ebusiness model? A. A business model details how a company creates, delivers, and generates revenue. An ebusiness model does all of the same except on the Internet. B. A business model and an ebusiness model are identical. C. A business model and an ebusiness model are complete opposites. D. An ebusiness model details how a company creates, delivers, and generates revenue. A business model does all the same except on the Internet. Answer: A. A business model details how a company creates, delivers, and generates revenue. An ebusiness model does all of the same except on the Internet. Rationale: A business model details how a company creates, delivers, and generates revenue. An ebusiness model does all the same except on the Internet. 2. What are the four main types of ebusiness models? A. Business-to-borrower, business-to-consumer, consumer-to-business, and consumer-to-consumer. B. Business-to-business, business-to-consumer, consumer-to-business, and consumer-to-consumer. C. Business-to-business, business collaboration, collective business, and consumer-to-consumer. D. Ebusiness-to-ebusiness, e business-to-ebusiness, econsumer-to-ebusiness, and econsumer-to-econsumer. Answer: B. Business-to-business, business-to-consumer, consumer-to-business, and consumer-to-consumer. Rationale: The four main types of ebusiness models are (1) business-to-business (B2B), (2) business-to-consumer (B2C), (3) consumer-to-business (C2B), and (4) consumer-to-consumer (C2C). 3. What is the difference between a B2C and a C2B? A. B2C focuses on companies as customers, and C2B focuses on consumers as customers. B. B2C focuses on collaboration, and C2B focuses on consumers. C. B2C focuses on business to consumers, and C2B focuses on consumers to business. D. B2C focuses on consumers as customers, and C2B focuses on companies as customers. Answer: C. B2C focuses on business to consumers, and C2B focuses on consumers to business. Rationale: Business-to-consumer, consumer-to-business. 4. What is the ebusiness model that applies to customers offering goods and services to each other over the Internet? A. C2C B. C2B C. BBB D. B2C Answer: A. C2C Rationale: C2C is the ebusiness model that applies to customers offering goods and services to each other over the Internet. 5. What is the ebusiness model that represents 80 percent of all online businesses and is typically more complex, requiring greater security needs? A. Consumer-to-consumer B. Business-to-consumer C. Consumer-to-business D. Business-to-business Answer: D. Business-to-business Rationale: B2B relationships represent 80 percent of all online businesses and are typically more complex, requiring greater security needs than the other types. 6. Which of the following represents businesses buying from and selling to each other over the Internet? A. B2B B. B2C C. C2B D. C2C Answer: A. B2B Rationale: This is the definition of B2B. 7. Carfax is an example of a company that sells its products or services directly to its consumers online. Which ebusiness model is Carfax using? A. C2B B. C2C C. B2C D. B2B Answer: C. B2C Rationale: This is the definition of B2C. 8. What is another name for an eshop? A. C2C B. Estore or etailer C. Ecustomer D. Econsumer Answer: B. Estore or etailer Rationale: An eshop is also referred to as an estore or etailer. 9. Which category below represents the three common forms of business operations, brick-and-mortar, click-and-mortar, and pure play? A. C2B B. C2C C. B2C D. All of these Answer: C. B2C Rationale: These are all forms of B2C. 10. John and Jenny have been saving for two years to take their six children on a vacation to Disneyworld. They are surprised to find out that airline tickets are far more expensive than they had anticipated. They decide to try to find cheaper tickets on Priceline, where they are allowed to set their own price they are willing to pay for the airline tickets. What form of ebusiness model are John and Jenny using? A. CBC B. B2B C. C2B D. C2C Answer: C. C2B Rationale: C2B applies to any consumer who sells a product or service to a business on the Internet. 11. What type of revenue generation model is Google using when it generates revenue by allowing advertisers to bid on common search terms? A. Awesome B. Analytics C. Applications D. Adwords Answer: D. Adwords Rationale: Adwords, a part of the Google site, allows advertisers to bid on common search terms. The advertisers simply enter in the keywords they want to bid on and the maximum amounts they want to pay per click per day. 12. What is a business that operates in a physical store without an Internet presence? A. Brick-and-mortar business B. Click-and-mortar business C. Virtual business D. Pure-play business Answer: A. Brick-and-mortar business Rationale: This is the definition of a brick-and-mortar business. 13. What is a pure-play business? A. A business that operates only on the Internet without a physical store. B. A business that sells products only in a physical store. C. A business that sells services only in a physical store. D. All of these. Answer: A. A business that operates only on the Internet without a physical store. Rationale: A pure-play, or virtual, business is a business that operates only on the Internet without a physical store, such as Google or Amazon. 14. What are the three primary models that a B2C business can use to operate? A. Click-and-brick, click-and-mortar, pure-play B. Brick-and-mortar, click-and-mortar, virtual C. Brick-and-mortar, click-and-consumer, virtual-and-consumer D. Brick-and-click, brick-and-mortar, brick-and-virtual Answer: B. Brick-and-mortar, click-and-mortar, virtual Rationale: The three ways for a business-to-consumer business to operate are brick-and-mortar, click-and-mortar, and virtual or pure-play. 15. Which type of ebusiness model is Amazon using? A. Pure-play B. Brick-and-mortar C. Click-and-mortar D. Content provider Answer: A. Pure-play Rationale: Amazon.com is an example of a B2C pure-play business. 16. Which type of ebusiness model is Barnes and Noble using? A. Pure-play B. Brick-and-mortar C. Click-and-mortar D. Virtual Answer: C. Click-and-mortar Rationale: Barnes and Noble is a click-and-mortar business, as it operates on the Internet and has physical stores. 17. Which type of ebusiness model best describes Apple? A. Pure-play B. Brick-and-mortar C. Click-and-mortar D. Virtual Answer: C. Click-and-mortar Rationale: Apple is a click-and-mortar business, as it operates on the Internet and has physical stores. 18. What is a plan that details how a company creates, delivers, and generates revenues on the Internet? A. Ebusiness B. Ebusiness model C. Ecommerce D. Ecommerce model Answer: B. Ebusiness model Rationale: This is the definition of an ebusiness model. 19. What occurs when a new radical form of business enters the market that reshapes the way companies and organizations behave? A. Ecommerce model B. Eshop sale C. Paradigm shift D. Web 1.0 Answer: C. Paradigm shift Rationale: This is the definition of paradigm shift. 20. Which of the following represents a brick-and-mortar business? A. The Gap B. Amazon C. Google D. T.J. Maxx Answer: D. T.J. Maxx Rationale: T.J. Maxx is the only company above that operates using a brick-and-mortar business only. 21. All of the following are forms of ebusiness except ______________. A. Subscription fee B. Content provider C. Infomediaries D. Online marketplace Answer: A. Subscription fee Rationale: As more and more companies began jumping into ebusiness, new forms of ebusiness emerged, including (1) content providers, (2) infomediaries, (3) online marketplaces, (4) portals, (5) service providers, and (6) transaction brokers. 22. Which of the below is not a valid form of ebusiness revenue model? A. Value-added service fees B. Subscription fees C. Advertising fees D. Service provider Answer: D. Service provider Rationale: Examples of ebusiness revenue models are (1) advertising fees, (2) license fees, (3) subscription fees, (4) transaction fees, and (5) value-added services. 23. For the past 20 years, Perry has been an owner of several Coldwell Banker Real Estate franchises. To increase business Perry spends a great deal of money marketing and advertising his businesses online. Perry decides he would like to move beyond just marketing and create an actual ebusiness that acts like a search engine but focuses on only the real estate industry. The main revenue source for Perry's ebusiness will be a charge of $50 a month for each property that is listed on the website. What is the primary revenue model for Perry's new business? A. License fees B. Advertising fees C. Subscription fees D. All of these Answer: C. Subscription fees Rationale: This is an example of using the subscription fees ebusiness revenue model. 24. Which of the following represents the connecting and communicating tools supporting and driving ebusiness? A. Email, instant messaging, podcasting, content management systems, and video and web conferencing. B. Content providers, infomediaries, online marketplaces, portals, service providers, and transaction brokers. C. B2B, B2C, C2C, and C2B. D. Advertising fees, license fees, subscription fees, transaction fees, and value-added service fees. Answer: A. Email, instant messaging, podcasting, content management systems, and video and web conferencing. Rationale: The six primary ebusiness tools for connecting and communicating are email, instant messaging, podcasting, content management systems, and video and web conferencing. 25. Which of the following represents the primary forms of ebusiness? A. Email, instant messaging, podcasting, content management systems, and video and web conferencing. B. Content providers, infomediaries, online marketplaces, portals, service providers, and transaction brokers. C. B2B, B2C, C2C, and C2B. D. Advertising fees, license fees, subscription fees, transaction fees, and value-added service fees. Answer: B. Content providers, infomediaries, online marketplaces, portals, service providers, and transaction brokers. Rationale: The primary forms of ebusiness highlighted in the figure include content providers, infomediaries, online marketplaces, portals, service providers, and transaction brokers. 26. Which of the following lists the primary ebusiness revenue models? A. Email, instant messaging, podcasting, content management systems, and video and web conferencing. B. Content providers, infomediaries, online marketplaces, portals, service providers, and transaction brokers. C. B2B, B2C, C2C, and C2B. D. Advertising fees, license fees, subscription fees, transaction fees, and value-added service fees. Answer: D. Advertising fees, license fees, subscription fees, transaction fees, and value-added service fees. Rationale: The primary ebusiness revenue models include advertising fees, license fees, subsection fees, transaction fees, value-added service fees as detailed in the figure. 27. Which of the following lists the categories for ebusiness models? A. Email, instant messaging, podcasting, content management systems, and video and web conferencing. B. Content providers, infomediaries, online marketplaces, portals, service providers, and transaction brokers. C. B2B, B2C, C2C, and C2B. D. Advertising fees, license fees, subsection fees, transaction fees, and value-added service fees. Answer: C. B2B, B2C, C2C, and C2B. Rationale: The categories for ebusiness models include B2B, B2C, C2C, and C2B. 28. What is an ISP? A. Instant service provider, a company that provides access to the Internet for a monthly fee. B. Internet service provider, a company that provides access to the Internet for a monthly fee. C. Internet sales provider, a company that provides access to the Internet for a monthly fee. D. Instant sales provider, a company that provides access to the Internet for a monthly fee. Answer: B. Internet service provider, a company that provides access to the Internet for a monthly fee. Rationale: This is the definition of an ISP. 29. Which of the below is not an ISP? A. Comcast B. Facebook C. AOL D. Earthlink Answer: B. Facebook Rationale: Examples of ISPs include AOL, AT and T, Comcast, Earthlink, Netzero, Juno, and many more. 30. What occurs when a system updates information at the same rate it receives the information? A. Collective intelligence system B. Collaboration system C. Real-time communication D. Knowledge management system Answer: C. Real-time communication Rationale: This is the definition of real-time communication. 31. What is the primary business advantage of using email? A. Increasing the speed of order entry. B. Providing the ability to inform and communicate with many people simultaneously, immediately, and with ease. C. Providing the ability to have friends all over the globe. D. Increasing the number of computers required in an office. Answer: B. Providing the ability to inform and communicate with many people simultaneously, immediately, and with ease. Rationale: The primary business advantage to email is the ability to inform and communicate with many people simultaneously, immediately, and with ease. 32. What is another term for instant messaging? A. IMing B. HTML C. Podcasting D. Webing Answer: A. IMing Rationale: Instant messaging is also abbreviated to IMing. 33. What is a service that enables instant or real-time communication between people? A. URL B. IMing C. Tacit knowledge D. Elicit knowledge Answer: B. IMing Rationale: This is the definition of instant messaging. 34. What are some of the immediate results businesses found from using instant messaging? A. Quickly identify which employees are at their computers. B. Easily hold simultaneous IM sessions with multiple people. C. Resolve questions or problems immediately. D. All of these. Answer: D. All of these. Rationale: All of these were results business found from utilizing instant messaging. 35. What converts an audio broadcast for use by a digital music player? A. Podcasting B. Videoconferencing C. Photo sharing D. Email Answer: A. Podcasting Rationale: This is the definition of podcasting. 36. As a trainer for Exempla Healthcare, Tina is faced with many challenges to properly training her new hires. There are over 40 different locations where Exempla employees work across the Chicago metro area. Tina decides to implement some valuable ebusiness tools to help reduce traveling costs, increase speed, and provide flexibility for completing training sessions with all the new hires. Tina primarily uses PowerPoints and videos during her training modules. What is the most effective ebusiness tool for Tina to implement and accomplish all of her training goals? A. IMing B. Webinar C. Blog D. Email Answer: B. Webinar Rationale: Web conferencing blends videoconferencing with document sharing and allows the user to deliver a presentation over the web to a group of geographically dispersed participants. 37. Companies use __________ as marketing communication channels, discussing everything from corporate strategies to detailed product overviews. A. IMing B. Web browsing C. Email D. Podcasting Answer: D. Podcasting Rationale: Companies use podcasting as marketing communication channels, discussing everything from corporate strategies to detailed product overviews. 38. Illuminate Live is a lecture program used in schools and is considered a(n) _________ tool. A. Instant messaging B. Explicit knowledge C. Web conferencing D. Egovernment Answer: C. Web conferencing Rationale: Illuminate Live is a lecture program used in schools that utilizes the ebusiness tool web conferencing to deliver the lecture. 39. What is a well-planned strategy that ensures the search and navigation functions are easy to use and user-friendly on a website? A. Blog B. Taxonomy C. Email D. Podcast Answer: B. Taxonomy Rationale: A well-planned taxonomy ensures search and navigation are easy and user-friendly on a website. 40. What is the set of ideas about how all information in a given context should be organized? A. Information architecture B. Collective intelligence C. Content management system D. Ebusiness model Answer: A. Information architecture Rationale: This is the definition of information architecture. 41. Which of the below is not considered an advantage of a content management system? A. Content management systems store website content. B. Content management systems increase order entry speed. C. Content management systems manage website creation. D. Content management systems allow editing and publication of information. Answer: B. Content management systems increase order entry speed. Rationale: A content management system (CMS) can help companies manage the creation, storage, editing, and publication of their website content. 42. Which ebusiness tool increases the speed of business by allowing the transfer of documents with the same speed as the telephone? A. Knowledge management system B. Podcasting C. Email D. Ebusiness Answer: C. Email Rationale: Email is an ebusiness tool that increases the speed of business by allowing the transfer of documents with the same speed as the telephone. 43. What is the ebusiness tool that can increase marketing reach and build customer loyalty through audio broadcasting? A. IMing B. Email C. Taxonomy D. Podcasting Answer: D. Podcasting Rationale: Podcasting is an ebusiness tool that can increase marketing reach and build customer loyalty through audio broadcasting. 44. Which ebusiness tool plays a crucial role in getting website visitors to view more than just the home page by providing clear navigation choices? A. URL B. CMS C. Open system D. Open source Answer: B. CMS Rationale: A content management system plays a crucial role in getting site visitors to view more than just the home page by having clear navigation choices for visitors. 45. Which of the following is a challenge facing an ebusiness? A. Improving information content B. Increasing convenience C. Decreasing costs D. Increasing liabilities Answer: D. Increasing liabilities Rationale: Increased liability is an ebusiness challenge. 46. What are the four challenges facing ebusinesses outlined in the text? A. Identifying limited market segments, managing consumer trust, ensuring consumer protection, and improving information content. B. Decreasing costs, increasing convenience, identifying limited market segments, and adhering to taxation rules. C. Identifying limited market segments, managing consumer trust, ensuring consumer protection, and adhering to taxation rules. D. Differs depending on the industry where the business operates. Answer: C. Identifying limited market segments, managing consumer trust, ensuring consumer protection, and adhering to taxation rules. Rationale: The four ebusiness challenges that the book outlines are identifying limited market segments, managing consumer trust, ensuring consumer protection, and adhering to taxation rules. 47. Managing consumer trust is a challenge for ebusinesses. Which of the following is a good way to build trust when working with customers over the Internet? A. Be accessible to communicate in-person. B. Be available to communicate in-person. C. Use customer testimonials that link to your client's website. D. All of these. Answer: D. All of these. Rationale: Managing consumer trust is a challenge for ebusinesses. Ways to build trust include being accessible and available to communicate in-person, and also by using customers' testimonials that link to your client's website. 48. Internet marketers must develop ___________ to build strong relationships with customers to ensure loyalty. A. Consumer trust B. Consumer testimonials C. Consumer segmentation D. Market segmentation Answer: A. Consumer trust Rationale: Internet marketers must develop consumer trust to ensure strong relationships with customers to ensure loyalty. 49. Ben Schultz decides to purchase an iPad on eBay. After the transaction completes and the money is withdrawn from Ben's PayPal account, the iPad never shows up and the email address of the seller bounces. What issue has Ben encountered? A. The physical separation of buyer and seller B. Adhering to taxation rules C. Identifying limited market segments D. All of these Answer: A. The physical separation of buyer and seller Rationale: The physical separation of buyer and seller and the merchandise is always a risk that is taken into account when trying to improve the managing consumer trust ebusiness challenge. 50. Susan teaches many individuals and business professionals how and why to use social media, and the benefits and challenges to using social media. Of the four ebusiness challenges, which of the following is the most crucial challenge to consider before engaging in social media? A. Adhering to taxation rules B. Ensuring consumer protection C. Identifying limited market segments D. Managing consumer relationships Answer: B. Ensuring consumer protection Rationale: Of the four ebusiness challenges, ensuring consumer protection is the most crucial challenge to consider before engaging in social media sites. 51. Many believe that U.S. tax policy should provide a level playing field for traditional retail businesses, mail-order companies, and online merchants. What form of ebusiness challenge is this statement referring to? A. Adhering to taxation rules B. Ensuring consumer protection C. Identifying limited market segments D. Managing consumer relationships Answer: B. Ensuring consumer protection Rationale: Many believe that U.S. tax policy should provide a level playing field for traditional retail businesses, mail-order companies, and online merchants regarding taxation rules. This is a challenge for ebusinesses. 52. Which of the below statements is accurate when considering the ebusiness challenge of adhering to taxation rules? A. All online companies must pay sales tax. B. Online companies do not have to pay any sales tax. C. Some online companies have to charge sales tax. D. Online companies that sell physical products have to pay sales tax and online companies that provide intangible services do not. Answer: C. Some online companies have to charge sales tax. Rationale: Some online companies have to charge sales tax and some do not. Fill in the Blank Questions 53. An online version of a retail store where customers can shop at any hour is called a(n) _________. Answer: Eshop 54. Business-to-business applies to businesses buying from and selling to each other over the ______________. Answer: Internet 55. __________ single-handedly increased the speed of business through the exchange of digital messages over the Internet. Answer: Email 56. The blending of videoconferencing with document sharing is the ebusiness tool called web conferencing or a __________. Answer: Webinar 57. The main challenge to ebusiness is the lack of growth in some sectors due to product or service __________. Answer: Limitations 58. One of the main challenges that ___________ faces is ensuring consumer protection, guarding consumers against unsolicited goods and invasion of privacy. Answer: Ebusiness 59. The Internet marketplace remains mostly free of traditional forms of sales tax, partially because ecommerce law is vaguely defined, making adhering to ___________ rules and laws a challenge for ebusiness. Answer: Tax 60. An ebusiness __________ is a plan that details how a company creates, delivers, and generates revenues on the Internet. Answer: Model 61. Business-to-consumer applies to any __________ that sells its products or services directly to consumers online. Answer: Business 62. Consumer-to-consumer applies to sites primarily offering goods and services to assist ____________ interacting with each other over the Internet. Answer: Consumers 63. Consumer-to-business applies to any _________ who sells a product or service to a business on the Internet. Answer: Consumer 64. A ________ and-mortar business operates in a physical store without an Internet presence. Answer: Brick 65. Google is an example of a _________ -play business. Answer: Pure 66. Barnes and Noble is an example of a _________ -and-mortar business. Answer: Click 67. T.J. Maxx is an example of a _________ -and-mortar business. Answer: Brick True/False Questions 68. A click-and-motor business operates on the Internet only, without a physical store. Answer: False Rationale: This is the definition of a pure-play (virtual) business, which operates on the Internet only, without a physical store. 69. The majority of eBay's customers are using a business-to-business (B2B) ebusiness model. Answer: False Rationale: The majority of eBay's customers are using a consumer-to-consumer (C2C) ebusiness model. 70. Taxonomy is the set of ideas about how all information in a given context should be organized. Answer: False Rationale: Information architecture is the set of ideas about how all information in a given context should be organized. 71. A webinar is a form of web conferencing, which blends videoconferencing with document sharing and allows the user to deliver a presentation over the web to a group of geographically dispersed participants. Answer: True Rationale: A webinar is a form of web conferencing, which blends videoconferencing with document sharing and allows the user to deliver a presentation over the web to a group of geographically dispersed participants. 72. Many businesses are using instant messaging as a way to answer and resolve questions or problems quickly. Answer: True Rationale: Instant messaging is a way to answer and resolve questions or problems quickly. 73. Managing consumer trust is not a challenge for ebusiness participants, as the Internet has numerous security technologies in place to completely protect consumers and their online transactions. Answer: False Rationale: Managing consumer trust is a challenge facing ebusinesses. 74. The Internet marketplace is free of most forms of traditional sales tax. Answer: True Rationale: The Internet marketplace is mostly free of traditional forms of sales tax. 75. The Internet uses such strong security technologies that ensuring consumer protection is not a challenge for ebusinesses. Answer: False Rationale: Ensuring consumer protection is an ebusiness challenge. 76. Content providers are companies that generate revenue by providing digital content, such as news, music, photos, or videos. Examples include Netflix and iTunes. Answer: True Rationale: This is the definition of content provider in the figure showing ebusiness forms. 77. Transaction brokers process online sales transactions. Answer: True Rationale: This is the definition of transaction brokers in the figure showing ebusiness forms. 78. An ebusiness model is a plan that details how a company creates, delivers, and generates revenues using the Internet. Answer: True Rationale: An ebusiness model is an approach to conducting electronic business on the Internet. 79. Business-to-consumer applies to any business that sells its products or services directly to consumers online. Answer: True Rationale: Business-to-consumer applies to any business that sells its products or services directly to consumers online. Essay Questions 80. Compare the four categories of ebusiness models. Answer: Business-to-business (B2B) applies to businesses buying from and selling to each other over the Internet. Business-to-consumer (B2C) applies to any business that sells its products or services to consumers over the Internet. Consumer-to-business (C2B) applies to any consumer that sells a product or service to a business over the Internet. Consumer-to-consumer (C2C) applies to sites primarily offering goods and services to assist consumers interacting with each other over the Internet. The primary difference between B2B and B2C are the customers; B2B customers are other businesses, while B2C markets to consumers. Overall, B2B relations are more complex and have higher security needs. B2B is the dominant ebusiness force, representing 80 percent of all online business. 81. Describe the six ebusiness tools for connecting and communicating. Answer: As firms began to move online, more MIS tools were created to support ebusiness processes and requirements. The ebusiness tools used to connect and communicate include email, instant messaging, podcasting, content management systems, videoconferencing, and web conferencing. 82. Identify the four challenges associated with ebusiness. Answer: Although the benefits of ebusiness are enticing, developing, deploying, and managing ebusiness systems is not always easy. The challenges associated with ebusiness include identifying limited market segments, managing consumer trust, ensuring consumer protection, and adhering to taxation rules. Test Bank for Business Driven Technology Paige Baltzan 9780073376844, 9781259924927, 9781260727814, 9780073376905

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