SEVI 3013 Exam 2 Questions with Verified Solutions Graded A+
Business model - Answers 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 - Answers how companies do business is as
important to competitive advantage as what they do
Components of business model - Answers revenue model, cost structure, margin/finance model,
resource velocity/turnover model
Customer Value Concept (CVC) - Answers 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 - Answers 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 - Answers 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 - Answers razor-razorblades, subscription, pay as you go,
freemium, wholesale, agency, bundling
Dynamic nature of business models - Answers 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 - Answers 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 - Answers a market-based move that is taken to fine-tune a strategy; usually
involves fewer resources; relatively easy to implement and reverse
Strategic moves - Answers market-based move that involves a significant commitment of
organizational resources and is difficult to implement or reverse
Competition - Answers the struggle among producers for the dollars of consumers
What firms compete for - Answers customers, geographic resources, inputs, talent, capital,
technology
Competitor analysis - Answers 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 - Answers 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 - Answers 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 - Answers awareness, motivation, ability
Cost - Answers amount it takes to manufacture
Price - Answers amount it sells for
Arenas in competitive dynamics - Answers where competition occurs (Cost and Price,
Technology and Features)
First move advantages - Answers customer loyalty, brand awareness, early market share gains
(scale advantages), tying up scale resources, learning curve advantages
Second move advantages - Answers learn from mistakes, creative imitation, experience in the
market
Late move advantages - Answers achieve considerably less success than first and second
movers, require considerable time to understand how to create at least as much customer value
as that offered by first and second movers
Learning curve - Answers depiction that shows that at the beginning the cost per unit is more
and goes down and flattens as time goes on and improvements are made
Predictors of likelihood of attack - Answers market commonality, resource similarity, awareness,
motivation, ability, first-mover benefits, organizational size, quality
Corporate strategy - Answers specifies action a firm takes to gain a competitive advantage by
selecting and managing a group of different businesses competing in different product markets
Questions that corporate strategies answer - Answers What industries are we in? Vertical
integration? What should be our geographic scope?
Diversification - Answers scope of the markets and industries in which the firm competes; how
managers buy, create, and sell different businesses to match skills and strengths with
opportunities presented to the firm; company growth through starting up or acquiring
businesses outside the company's current products and markets
Types of diversification - Answers low level, moderate to high level, very high level
Business model - Answers 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 - Answers how companies do business is as
important to competitive advantage as what they do
Components of business model - Answers revenue model, cost structure, margin/finance model,
resource velocity/turnover model
Customer Value Concept (CVC) - Answers 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 - Answers 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 - Answers 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 - Answers razor-razorblades, subscription, pay as you go,
freemium, wholesale, agency, bundling
Dynamic nature of business models - Answers 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 - Answers 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 - Answers a market-based move that is taken to fine-tune a strategy; usually
involves fewer resources; relatively easy to implement and reverse
Strategic moves - Answers market-based move that involves a significant commitment of
organizational resources and is difficult to implement or reverse
Competition - Answers the struggle among producers for the dollars of consumers
What firms compete for - Answers customers, geographic resources, inputs, talent, capital,
technology
Competitor analysis - Answers 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 - Answers 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 - Answers 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 - Answers awareness, motivation, ability
Cost - Answers amount it takes to manufacture
Price - Answers amount it sells for
Arenas in competitive dynamics - Answers where competition occurs (Cost and Price,
Technology and Features)
First move advantages - Answers customer loyalty, brand awareness, early market share gains
(scale advantages), tying up scale resources, learning curve advantages
Second move advantages - Answers learn from mistakes, creative imitation, experience in the
market
Late move advantages - Answers achieve considerably less success than first and second
movers, require considerable time to understand how to create at least as much customer value
as that offered by first and second movers
Learning curve - Answers depiction that shows that at the beginning the cost per unit is more
and goes down and flattens as time goes on and improvements are made
Predictors of likelihood of attack - Answers market commonality, resource similarity, awareness,
motivation, ability, first-mover benefits, organizational size, quality
Corporate strategy - Answers specifies action a firm takes to gain a competitive advantage by
selecting and managing a group of different businesses competing in different product markets
Questions that corporate strategies answer - Answers What industries are we in? Vertical
integration? What should be our geographic scope?
Diversification - Answers scope of the markets and industries in which the firm competes; how
managers buy, create, and sell different businesses to match skills and strengths with
opportunities presented to the firm; company growth through starting up or acquiring
businesses outside the company's current products and markets
Types of diversification - Answers low level, moderate to high level, very high level
