Developing an Effective Business Model Part 2

35) The first box in the Barringer/Ireland Business Model Template is ________. A) product/market scope B) revenue streams C) business mission D) target market E) channels Answer: C 36) When completing the basis of differentiation box in the Barringer/Ireland Business Model Template, it is best to limit the description to ________. A) two to three points B) one point C) five to10 points D) two to three points for manufacturing firms and five to 10 points for service firms E) five to 10 points for manufacturing firms and two to three points for service firms Answer: A 37) A firm's ________ market is a place within a larger market segment that represents a narrower group of customers with similar interests. A) aspirational B) ambitious C) constrained D) target E) objective Answer: D 38) Kaitlyn Harris is opening up a women's fashion boutique that will focus on professional women that are 18-30 years old. The age range of women that Kaitlyn plans to focus on is referred to as her ________ market. A) controlled B) ambitious C) identifiable D) target E) aspirational Answer: D 39) A company's ________ scope defines the products and markets on which it will concentrate. A) product/market B) offering/industry C) business/market D) business/industry E) offering/market Answer: A 40) Erin Hill is working on the box in the Barringer/Ireland Business Model Template that defines the products and markets on which her firm will concentrate. Erin is working on the ________ scope portion of the business model template. A) offering/market B) offering/industry C) business/market D) business/industry E) product/market Answer: E 41) The Resources section of the Barringer/Ireland Business Model Template consists of the ________ and ________ boxes. A) business mission; core competency B) core competency; product/market scope C) channels; key partners D) core competency; key assets E) revenue streams; key assets Answer: D 42) In the Barringer/Ireland Business Model Template, a(n) ________ is a specific factor or capability that supports a firm's business model and sets it apart from its rivals. A) primary capability B) core competency C) essential asset D) staple proficiency E) key aptitude Answer: B 43) Mark White is the founder of a firm that builds iPhone apps. Mark is very technically savvy, which allows him to build apps quickly and with minimal bugs or problems. In the terminology of the Barringer/Ireland Business Model Template, Mark's technical savvy is a(n) ________ of his firm. A) primary capability B) core competency C) essential asset D) staple proficiency E) key aptitude Answer: B 44) In the terminology of the Barringer/Ireland Business Model Template, ________ assets are the assets that a firms owns that enable its business model to work. A) key B) tactical C) fundamental D) primary E) strategic Answer: A 45) In the Barringer/Ireland Business Model Template, key assets can be ________. A) fixed, situational, variable, and permanent B) tactical, strategic, fixed, and variable C) tangible, intangible, variable, and fixed D) temporary, permanent, fixed, and variable E) physical, financial, intellectual, or human Answer: E 46) The Financials section of the Barringer/Ireland Business Model Template consists of three boxes. The boxes are titled ________. A) economics of the business, startup-costs, and break-even B) revenue streams, cost structure, and financing/funding C) profit margins, revenue streams, and break-even D) startup-costs, operating leverage, and financing/funding E) fixed vs variables costs, financing/funding, and break-even Answer: B 47) Which section of the Barringer/Ireland Business Model Template is the only section that describes how it makes money? A) Core strategy B) Resources C) Financials D) Operations E) Value proposition Answer: C 48) A firm's ________ describe(s) the ways in which it makes money. A) proceeds account B) break-even analysis C) revenue streams D) cash flow E) income statement Answer: C 49) Advertising, commissions, download fees, licensing, and product sale are examples of ________. A) revenue streams B) basis of differentiation C) key assets D) channels E) cost structure Answer: A 50) In the terminology of the Barringer/Ireland Business Model Template, a firm's ________ structure describes the most important costs incurred to support its business model. A) expense B) cost C) budget D) overhead E) outflow Answer: B 51) Jenna Franklin is completing the portion of the Barringer/Ireland Business Model Template that describes the most important costs that will be incurred to support her business model. Jenna is completing the ________ structure box in the business model template. A) expense B) outlay C) payment D) overhead E) cost Answer: E 52) ________ costs are costs that remain the same despite the volume of goods or services produced. ________ costs vary proportionally with the volume of goods or services provided. A) Expense; Non-standard B) Standard; Non-Standard C) Fixed; Variable D) Non-Standard; Standard E) Variable; Fixed Answer: C 53) According to the textbook, there are three categories of costs to consider when completing the "financing/funding" section of the Barringer/Ireland Business Model Template. These are ________. A) setup costs, one-time expenses, and costs associated with incorporating the firm B) capital costs, marketing costs, and provisions for ramp-up expenses C) setup costs, marketing costs, and operating costs D) capital costs, one-time expenses, and provisions for ramp-up expenses E) operating costs, capital costs, and costs associated with setting up the firm Answer: E 54) The operations quadrant in the Barringer/Ireland Business Model Template includes three sections. These are ________. A) product (or service) production, channels, and key partners B) product/market scope, cost structure, and key partners C) key assets, cost structure, and channels D) key partners, financing/funding, and target market E) channels, core competency, and key partners Answer: A 55) Sarah Green, who plans to open a garden and lawn business, is working on the portion of the Barringer/Ireland Business Model template that focuses on how her products and services will be produced. Sarah is working on the ________ section of the template. A) basis of differentiation B) product/or service production C) product/market scope D) core competency E) channels Answer: B 56) Brad Jones is in the process of opening an electronics supply company and is working on the portion of his business plan template that describes how he will deliver his products and services to his customers. The portion of the business plan template that Brad is working on is referred to as ________. A) channels B) network C) linkages D) grids E) conduits Answer: A 57) Cynthia Hamilton is launching a chain of smoothie restaurants. Among Cynthia's key partners will be firms that provide her the ingredients needed to make her smoothies. In the terminology of the Barringer/Ireland Business Model Template, these partners are called ________. A) dealers B) suppliers C) merchants D) traders E) brokers Answer: B 58) An entity created by two or more firms pooling a portion of their resources to create a separate, jointly-owned organization is called a ________. A) trade association B) network C) joint venture D) consortia E) strategic alliance Answer: C 59) The four major categories in the Barringer/Ireland Business Model Template are: core strategy, resources, financials, and operations. Answer: TRUE 60) Core strategy describes what causes consumers to pick one company's products over another. Answer: FALSE 61) A business's mission or mission statement describes why it exists and what its business model is supposed to accomplish. Answer: TRUE 62) When competing the basis for differentiation portion of the Barringer/Ireland Business Model template, it is important to emphasize as many points of differentiation as possible. Answer: FALSE 63) A company's target market is a place within a larger market segment that represents a narrower group of customers with similar interests. Answer: TRUE 64) A company's product/market scope defines the products and markets on which it will concentrate. Answer: TRUE 65) The resources section of the Barringer/Ireland Business Model Template includes three parts: core competency, key assets, and revenue streams. Answer: FALSE 66) In the terminology of the Barringer/Ireland Business Model Template, a key asset is a specific factor or capability that support a firm's business model and sets it apart from its rivals. Answer: FALSE 67) A firm's revenue streams describe the ways in which it makes money. Answer: TRUE 68) Value-driven businesses focus on minimizing costs wherever possible. Answer: FALSE 69) In the financing/funding section of the Barringer/Ireland Business Model Template, there are three categories of costs to consider: capital costs, one-time expenses, and provisions for rampup expenses. Answer: TRUE 70) The operations section of the Barringer/Ireland Business Model Template includes three sections: product (or service) production, channels, and key partners. Answer: TRUE 71) A company's channels describe how it delivers its product or service to its customers. Answer: TRUE 72) A strategic alliance is an entity created by two or more firms pooling a portion of their resources to create a separate, jointly-owned organization. Answer: FALSE 73) Describe the Barringer/Ireland Business Model Template and discuss its purpose. Answer: The Barringer/Ireland Business Model Template is a visual template that lays out the four major categories and 12 individual parts of a firm's business model. The job of the entrepreneur, or team of entrepreneurs, is to configure their firm's business model in a manner that produces a viable and exciting business. The Barringer/Ireland Business Model template is a tool that allows an entrepreneur to describe, project, revise, and pivot a business model until all 12 parts are decided upon. The 12 parts are spread out, which provides space for ideas to be recorded, scratched out, and recorded again as ideas morph and change. The four major categories and 12 individual parts are: Core Strategy (business mission, basis of differentiation, target market, and product/market scope), Resources (core competency and key assets), Financials (revenue streams, cost structure, and financing/funding), and Operations (product or service production, channels, and key partners). 74) Briefly describe the four main components of the Barringer/Ireland Business Model Template. Identify the subcomponents of each the four main components of a business model. Answer: The four main components of a business model are as follows: • Core Strategy. The first component of the Barringer/Ireland Business Model Template is core strategy. A core strategy describes how the firm plans to compete relative to its competitors. The primary elements of core strategy are: business mission, basis of differentiation, target market, and product/market scope. • Resources. The second component is resources. Resources are the inputs a firm uses to produce, sell, distribute, and service a product or service. At a basic level, a firm must have a sufficient amount of resources to enable its business model to work. Resources are developed and accumulated over time. The primary elements of resources are core competencies and key assets. • Financials. The third component of the Barringer/Ireland Business Model Template focuses on financials. For most businesses, the manner in which it makes money is one of the most fundamental aspects around which its business model is built. The primary aspects of financials are: revenue streams, cost structure, and financing/funding. • Operations. The final quadrant in a firm's business model is operations. Operations are both integral to a firm's overall business model and represent the day-to-day heartbeat of a firm. The primary elements of operations are: product or service production, channels, and key partners. 75) What are core competencies? Provide an example of the core competencies that are utilized by an entrepreneurial firm. Answer: A core competency is a specific factor or capability that support's a firm's business model and sets it apart from rivals. A core competency can take on various forms, such as technical know-how, an efficient process, a trusting relationship with customers, expertise in product design, and so forth. For example, Her Campus Media has three core competencies: (1) creating content of interest to active college-aged girls, (2) recruiting and managing a volunteer network, and (3) connecting active college-aged females with major brands.