SEVI 3013 Exam 2 UPDATED ACTUAL
Exam Questions and CORRECT Answers
Business model - CORRECT ANSWER - how the company intends to implement its' strategy
for a product or group of products; how the firm intends to make money
How a business model relates to strategy - CORRECT ANSWER - how companies do
business is as important to competitive advantage as what they do
Components of business model - CORRECT ANSWER - revenue model, cost structure,
margin/finance model, resource velocity/turnover model
Customer Value Concept (CVC) - CORRECT ANSWER - unique characteristics of your
product or service that the customer sees as adding value to the product and making it desirable
to purchase; developed relative to your competitors; interactively obtained by examining the
value provided by competitor's business models
Revenue streams - CORRECT ANSWER - increase revenues from existing revenue sources
and add new revenue streams to the business model (WAYS AN ORG CAN EARN $ BY
OFFERING PRODUCT TO CUSTOMERS)
Cost streams - CORRECT ANSWER - Costs that the company incurs in developing and
delivering the product to consumer-map out the basic sources of cost (LOOK AT DIFF PLACES
WHERE WE PAY MONEY TO MAKE OUR PRODUCTS EX RAW MATERIALS
MANUFACTURING)
Different kinds of business models - CORRECT ANSWER - razor-razorblades, subscription,
pay as you go, freemium, wholesale, agency, bundling
Dynamic nature of business models - CORRECT ANSWER - combination (many firms
employ multiple business models); models can evolve (freemium to subscription); models can be
disrupted (failed business models)
, Criteria to assess business models - CORRECT ANSWER - imitation Protection (secrecy,
trade mark, lead time); protection from stakeholder holdups; slack (ability to weather failure of
some elements of the business plan)
Tactical moves - CORRECT ANSWER - a market-based move that is taken to fine-tune a
strategy; usually involves fewer resources; relatively easy to implement and reverse
Strategic moves - CORRECT ANSWER - market-based move that involves a significant
commitment of organizational resources and is difficult to implement or reverse
Competition - CORRECT ANSWER - the struggle among producers for the dollars of
consumers
What firms compete for - CORRECT ANSWER - customers, geographic resources, inputs,
talent, capital, technology
Competitor analysis - CORRECT ANSWER - first step the firm takes to be able to predict its
competitors' actions and responses; technique firms use to understand their competitive
environment by studying competitors' future objectives, current strategies, assumptions,
capabilities
Market commonality - CORRECT ANSWER - number of markets with which the firm and a
competitor are jointly involved and the degree of importance of the individual markets to each
Resource commonality - CORRECT ANSWER - extent to which the firm's tangible and
intangible resources compare favorably to a competitor's in terms of type and amount
Drivers of competitive behavior - CORRECT ANSWER - awareness, motivation, ability
Cost - CORRECT ANSWER - amount it takes to manufacture
Exam Questions and CORRECT Answers
Business model - CORRECT ANSWER - how the company intends to implement its' strategy
for a product or group of products; how the firm intends to make money
How a business model relates to strategy - CORRECT ANSWER - how companies do
business is as important to competitive advantage as what they do
Components of business model - CORRECT ANSWER - revenue model, cost structure,
margin/finance model, resource velocity/turnover model
Customer Value Concept (CVC) - CORRECT ANSWER - unique characteristics of your
product or service that the customer sees as adding value to the product and making it desirable
to purchase; developed relative to your competitors; interactively obtained by examining the
value provided by competitor's business models
Revenue streams - CORRECT ANSWER - increase revenues from existing revenue sources
and add new revenue streams to the business model (WAYS AN ORG CAN EARN $ BY
OFFERING PRODUCT TO CUSTOMERS)
Cost streams - CORRECT ANSWER - Costs that the company incurs in developing and
delivering the product to consumer-map out the basic sources of cost (LOOK AT DIFF PLACES
WHERE WE PAY MONEY TO MAKE OUR PRODUCTS EX RAW MATERIALS
MANUFACTURING)
Different kinds of business models - CORRECT ANSWER - razor-razorblades, subscription,
pay as you go, freemium, wholesale, agency, bundling
Dynamic nature of business models - CORRECT ANSWER - combination (many firms
employ multiple business models); models can evolve (freemium to subscription); models can be
disrupted (failed business models)
, Criteria to assess business models - CORRECT ANSWER - imitation Protection (secrecy,
trade mark, lead time); protection from stakeholder holdups; slack (ability to weather failure of
some elements of the business plan)
Tactical moves - CORRECT ANSWER - a market-based move that is taken to fine-tune a
strategy; usually involves fewer resources; relatively easy to implement and reverse
Strategic moves - CORRECT ANSWER - market-based move that involves a significant
commitment of organizational resources and is difficult to implement or reverse
Competition - CORRECT ANSWER - the struggle among producers for the dollars of
consumers
What firms compete for - CORRECT ANSWER - customers, geographic resources, inputs,
talent, capital, technology
Competitor analysis - CORRECT ANSWER - first step the firm takes to be able to predict its
competitors' actions and responses; technique firms use to understand their competitive
environment by studying competitors' future objectives, current strategies, assumptions,
capabilities
Market commonality - CORRECT ANSWER - number of markets with which the firm and a
competitor are jointly involved and the degree of importance of the individual markets to each
Resource commonality - CORRECT ANSWER - extent to which the firm's tangible and
intangible resources compare favorably to a competitor's in terms of type and amount
Drivers of competitive behavior - CORRECT ANSWER - awareness, motivation, ability
Cost - CORRECT ANSWER - amount it takes to manufacture
