Business Models Chapter 1

Questions and Answers

What is a business model?

A plan to reduce environmental impacts

A strategy to increase employee salaries

A way to reduce costs in a company

A method of doing business by which a company can generate revenue to sustain itself (correct)

What is an example of a complex business model?

A TV station providing free broadcasting (correct)

A company selling only online

A company with only one product

Nokia selling cell phones

What is a type of digital age business model?

Direct Marketing

Physical Marketplaces

E-Marketplaces and Exchanges (correct)

Traditional Auctions

What are the three types of business pressures?

Market, technology, and societal pressures Signup and view all the answers

What is a business critical response activity?

A reaction to a pressure already in existence Signup and view all the answers

Why do business models need to change?

Due to changes in the business environment Signup and view all the answers

What is an example of a business pressure?

A change in consumer behavior Signup and view all the answers

What supports business critical response activities?

Information Technology (IT) Signup and view all the answers

What is essential for career effectiveness in the IT field?

Understanding how to build, use, and manage information systems Signup and view all the answers

What is the digital economy also known as?

The new economy or the Web economy Signup and view all the answers

What is an example of a digitizable product?

Magazines Signup and view all the answers

What is electronic business (E-business) also known as?

E-commerce Signup and view all the answers

What is the primary function of digital infrastructures?

To facilitate communication and collaboration Signup and view all the answers

What is the result of developing computer literacy?

Enhanced information literacy Signup and view all the answers

Which of the following is a characteristic of the digital economy?

Global platform for interaction and collaboration Signup and view all the answers

According to the US Bureau of Labor Statistics, what is the trend in IT-related occupations?

They are among the fastest growing Signup and view all the answers

What is the main difference between the Old Economy and New Economy in buying and selling textbooks?

The New Economy replaces the need for physical bookstores Signup and view all the answers

What is a characteristic of photography in the New Economy?

Scanning photos and emailing them Signup and view all the answers

What replaced tokens for bus and subway transportation in New York City in the New Economy?

Contactless cards Signup and view all the answers

What is a characteristic of checkout in the Old-old Economy?

Customer waits in line for the cashier to key in price of items Signup and view all the answers

What technology is used in the New Economy for paying for goods, checkout?

Wireless technology affixed to each item Signup and view all the answers

What is a characteristic of the Old Economy in photography?

Using cameras with film Signup and view all the answers

What is a characteristic of the New Economy in buying and selling textbooks online?

Online services such as Amazon.com are used Signup and view all the answers

What is a characteristic of checkout in the Old Economy?

Customer waits in line for the cashier to key in price of items Signup and view all the answers

What are the three types of business pressures discussed in the text?

Market, Technology, Societal Signup and view all the answers

Which of these is NOT a societal pressure?

Information Overload Signup and view all the answers

Which of these is an example of a market pressure?

Powerful Customers Signup and view all the answers

What is the goal of strategic systems?

Increasing market share and/or profits Signup and view all the answers

What is a key difference between 'Make-to-Order' and 'Mass Customization'?

Make-to-Order involves producing unique products, while Mass Customization involves producing customized versions of standard products. Signup and view all the answers

Which of these is NOT a strategy for responding to business pressures?

Technological Innovation Signup and view all the answers

What does 'E-business and E-commerce' refer to?

Selling products and services online Signup and view all the answers

Why is it important to study information systems?

All of the above Signup and view all the answers

What type of business pressure relates to the changing demographics of workers?

Market Pressures Signup and view all the answers

Which of the following is NOT an example of a Societal Pressure?

Technological Obsolescence Signup and view all the answers

Which organizational response is characterized by producing customized goods?

Make-to-Order Signup and view all the answers

What is the main goal of Strategic Systems in organizations?

To provide competitive advantages and improve profitability Signup and view all the answers

Which of the following is an example of a technology pressure that businesses face?

Rapid technological advancements Signup and view all the answers

What is the key difference between 'Make-to-Order' and 'Mass Customization'?

The level of customization Signup and view all the answers

Which of the following is NOT a benefit of learning about Information Technology (IT)?

Increasing the ability to use social media effectively Signup and view all the answers

Which organizational response focuses on creating a positive experience for customers?

Customer Focus Signup and view all the answers

Study Notes

Business Models

A business model is a method of doing business by which a company can generate revenue to sustain itself.
The model spells out how the company adds value to create a product or service.
Examples of business models:
Nokia makes and sells cell phones.
A TV station provides free broadcasting, its survival depends on a complex model involving advertisers and content providers.
Internet portals, such as Yahoo, also use a complex business model.

Digital Age Business Models

Name-Your-Own Price
Reverse Auctions
Affiliate Marketing
E-Marketplaces and Exchanges
Electric aggregation (buying groups)

Drivers Forcing Changes In Business Models

Business Pressures:
Environmental
Organizational
Technological factors
A response can be a reaction to a pressure already in existence, an initiative intended to defend an organization against future pressures, or an activity that exploits an opportunity created by changing conditions.

The Drivers of Change

Business Pressures, Organizational Responses, and IT Support:
Business Pressure - The business environment is the combination of social, legal, economic, physical, and political factors that affect business activities.
Significant changes in any of these factors are likely to create business pressure on the organization.

Three Types of Business Pressures

Market Pressures:
The Global Economy and Strong Competition
The Changing Nature of the Workforce
Powerful Customers
Technology Pressures:
Technological Innovation and Obsolescence
Information Overload
Societal Pressures:
Social Responsibility
Government Regulation and Deregulation
Protection Against Terrorist Attacks
Ethical Issues

Organizational Responses

Strategic Systems:
Enable organizations to increase market share and/or profits.
Customer Focus:
Enable organizations to provide superb customer service and prevent losing customers to competitors.
Make-to-Order:
Producing customized products and services.
Mass Customization:
Producing a large quantity of items, but customizing them to fit the desire of each customer.
E-business and E-commerce:
The strategy of doing business electronically.

Why Study Information Technology (IT)?

You will be more effective in your chosen career if you understand how successful information systems are built, used, and managed.
You also will be more effective if you know how to recognize and avoid unsuccessful systems and failures.
According to the US Bureau of Labor Statistics, the top seven fastest growing occupations fall within IT or computer related field.
Developing "Computer" Literacy will only enhance your "Information" Literacy.

Doing Business in the Digital Economy

The digital economy is an economy based on digital technologies, including communication networks, computers, software, and other related technologies.
Also called the Internet economy, the new economy, or the Web economy.
Digital infrastructures provide a global platform over which people and organizations interact, communicate, collaborate, and search for information.

New Economy vs. Old Economy

Examples:
Buying and Selling Textbooks
Photography
Paying for Transportation in New York City
Paying for Goods, Checkout

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Description

Learn about business models, how they generate revenue, and add value to create products or services. Examples of business models include Nokia, TV stations, and internet portals.