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Which e-tailing business model involves selling products directly to customers through its own website and physical stores?
What is a key aspect of Amazon's business strategy?
What is an important consideration in the financial analysis of e-commerce firms?
What is the primary theme in online retailing?
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Which financial statement is most relevant for analyzing a company's revenue, cost of sales, gross margin, and operating expenses?
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What is a key aspect of Amazon's technology strategy?
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What percentage of the total GDP does the U.S. retail market account for?
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What is the percentage of personal consumption attributed to nondurable goods?
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Which of the following is a concern for e-commerce firms like Amazon?
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What is a characteristic of mail order/telephone order (MOTO) sector?
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What is a key area of strategic analysis for e-commerce firms?
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What was one of the incorrect assumptions about e-commerce retail?
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What is true about the impact of the internet on the retail industry?
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What is the main difference between general merchandisers and specialty retailers?
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What is a common challenge faced by startup ventures in online retailing?
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Which of the following is a characteristic of the service sector?
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What is a key feature of service industries that makes them suited to e-commerce applications?
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What is the primary objective of established merchants in online retailing?
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What is a characteristic of online retailing that has led to its rapid growth?
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What is a category of service industries that includes doctors, lawyers, and accountants?
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What is a key feature of the growth of online retailing?
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What is the primary characteristic of online retail?
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Which of the following trends accelerated e-commerce growth between 2020 and 2024?
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What is the primary goal of omnichannel retailing?
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What is the result of the integration of multiple retailing channels?
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What is the primary benefit of personalization in online retail?
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What is the primary influence of social commerce on online retail?
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What is the result of augmented reality and virtual reality in online retail?
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What is the primary trend in online retail from 2020 to 2024?
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What is the primary influence of sustainability and ethical consumerism on online retail?
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Study Notes
Financial Analysis Factors
- Financial statements: Statements of Operations, Balance Sheet
- Statements of Operations: Revenues, Cost of Sales, Gross Margin, Operating Expenses, Operating Margin, Net Margin, Pro forma earnings (EBITDA)
- Balance Sheet: Assets, Current Assets, Liabilities, Current Liabilities, Long-term Debt, Working Capital
E-tailing Business Models
- Virtual Merchant: Amazon
- Bricks and Clicks: Walmart, J.C.Penney, Sears
- Catalog Merchant: Lands' End, L.L.Bean, Victoria's Secret
- Manufacturer-direct: Dell
E-commerce in Action: Amazon
- Vision: Earth's biggest selection, most customer-centric
- Business Model: Retail, Third-Party Merchants, and Amazon Web Services (merchant and developer services)
- Financial Analysis: Continued explosive revenue growth, profitable
- Strategic Analysis/Business Strategy: Maximize sales volume, lower costs and cut prices, acquisitions, mobile shopping, Kindle
- Strategic Analysis/Competition: Online and offline general merchandisers, Web services
E-commerce in Action: Amazon (continued)
- Strategic Analysis/Technology: Largest, most sophisticated collection of online retailing technologies available
- Strategic Analysis/Social, Legal: Sales tax, patent lawsuits
- Future Prospects: 2011 net sales grew 40%, significant gains in 2013, ranks among top five in customer service, speed, and accuracy
The Retail Sector
- Most important theme: Integrating online and offline operations
- U.S. retail market: $11.1 trillion (71% of total GDP)
- Personal consumption: Services (66%), Nondurable goods (23%), Durable goods (11%)
- "Goods" vs. "services" ambiguity
The Retail Industry
- 7 segments (clothing, durable goods, etc.)
- Internet uses differ for each segment: Information vs. direct purchasing
- General merchandisers vs. specialty retailers
- Mail order/telephone order (MOTO) sector: Most similar to online retail sector, sophisticated order entry, delivery, and inventory control systems
E-commerce Retail
- Vision: Reduced search and transaction costs, customers able to find lowest prices
- Assumptions: Lowered market entry costs, lower operating costs, higher efficiency, traditional physical store merchants forced out of business, disintermediation
- Reality: Few of these assumptions were correct, the structure of the retail marketplace has not been revolutionized, Internet has created new venues for multi-channel firms and supported a few pure-play merchants
Common Themes in Online Retailing
- Online retail fastest growing channel on revenue basis
- Profits for startup ventures have been difficult to achieve
- Disintermediation has not occurred
- Established merchants need to create integrated shopping experience to succeed online
- Growth of online specialty merchants, e.g. Blue Nile
- Extraordinary growth of social, local, and mobile e-commerce
The Service Sector: Offline and Online
- Service sector: Largest and most rapidly expanding part of economies of advanced industrial nations
- Concerned with performing tasks in and around households, business firms, and institutions
- Employs 4 out of 5 U.S. workers, 75% of economic activity
Service Industries
- Major service industry groups: Finance, Insurance, Real Estate, Travel, Professional services (legal, accounting, etc.), Business services (consulting, advertising, etc.), Health services, Educational services
- Two categories: Transaction brokers, Hands-on service providers
- Features: Knowledge- and information-intense, personalization and customization, level differs depending on type of service
Online Retail and Services
- Online retail or online shopping: Buying goods or services directly from a seller via the Internet
- Customers visit the company's website, select a product, enter payment information and shipping details, and then order the product
Major Trends in Online Retail
- 2012-2013: Mobile commerce nearly doubles, rapid growth in social commerce, online retail still the fastest growing retail channel
- 2020-2024: E-commerce growth accelerated due to the COVID-19 pandemic, mobile shopping continued to dominate, omnichannel retailing integrated online and offline channels, personalization and customer experience prioritized, social commerce and influencer marketing gained prominence, sustainability and ethical consumerism influenced purchasing decisions, Augmented Reality (AR) and Virtual Reality (VR) enhanced the online shopping experience
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Description
This quiz covers financial analysis factors, including revenues, cost of sales, and operating expenses, as well as e-tailing business models, such as virtual merchants.
