Learning Module 7 Business Models

Which four elements are core to describing a firm�s business model?

What term best describes grouping customers by geography, demographics, behavior, and preferences to guide marketing and product design?

A firm that bundles multiple complementary services and offers them together at a discount is using which pricing approach?

Which business model is most likely to have high fixed costs and low variable costs, making profits more sensitive to changes in sales?

Which of the following is an example of a one-sided network effect?

Which pricing model charges recurring fees for continued access to a product or service?

An analyst observing a firm that sells a low-cost printer and earns most margin on proprietary ink cartridges should label the pricing model as:

Which channel strategy involves selling directly to end customers without intermediaries?

Which of these is NOT a typical reason management might prefer internal financing according to pecking order theory?

An online marketplace that benefits as more sellers attract more buyers demonstrates which phenomenon?

Which revenue model charges customers differently by time of purchase or demand conditions?

Which factor most directly increases a platform�s value to users under network effects?

A firm sells specialized industrial equipment and also provides installation and long-term maintenance contracts. Which business model variation best describes the distributor or reseller role adding services?

Which pricing tactic is likely to best capture different willingness-to-pay across customer groups without changing list prices?

Which business model type commonly uses subscription fees as the primary revenue source?

Which of the following is a likely advantage of a firm using a direct sales channel instead of retail intermediaries?

An analyst finds a firm with a high proportion of fixed costs and specialized single-source suppliers. Which risk is most acute?

Which statement about value chains versus supply chains is correct?

Which innovation has most reduced the importance of physical store location for many retailers?

Which of the following best captures the analyst�s use of a business model?

A firm uses freemium pricing to grow users, then converts a small fraction to paid tiers. What characteristic of digital businesses makes this viable?

Which of the following is an example of crowdsourcing as used in some platform business models?

If a firm claims its pricing is justified by lower total cost of ownership for customers, the analyst should examine:

Which conventional business model typically earns revenue as a spread between interest received and interest paid?

A firm that sells products through its own stores, franchisees, and wholesale partners is using which distribution approach?

Which pricing model sets prices based on the economic value delivered to the customer, such as avoided hospitalization costs from a drug therapy?

Which of these is a likely downside of penetration pricing (deep discounts to build market share)?

Which of the following best describes a platform business that benefits from multiple interdependent network effects among restaurants, drivers, and customers?

Which statement about crowd contributions on platform businesses is consistent with the chapter?

Which business model element most directly determines a firm�s break-even volume for a product?

If a firm�s assets are highly fungible and liquid (real estate, receivables), how does that affect costs of financial distress?

Which conventional model is best described as 'selling finished goods to end users through stores and e-commerce with mark-ups on purchases'?

A firm that emphasizes proprietary proprietary consumables that work only with their hardware is implementing which competitive moat?

Which of the following is an example of a hidden revenue business model?

When evaluating an issuer�s business model, why should an analyst be cautious about relying solely on management�s description?

Which factor most enables rapid, low-cost targeted marketing to narrow customer segments?

A startup sells custom high-end watches made to order with long production lead times and high craftsmanship. Which channel and cost characteristics are most likely?

Which of the following best explains why OTA (online travel agencies) consolidated into a small number of large platforms?

Which pricing form is most reliant on estimating customer opportunity cost and avoided expenses to justify price?

If a firm sells directly and also uses large retailers to place products in many locations, which channel risk should the analyst consider most carefully?

Which conventional business model would most likely use a markup on purchased goods as its primary pricing mechanism?

A subscription software company claims that as users increase, unit costs fall faster than prices, improving profits. Which effect described in the chapter supports this claim?

Which of the following best captures the difference between a franchise and a license?

A firm relies on a single supplier for a rare input used in production. What business model assessment should the analyst prioritize?

Which of the following is most likely to be a characteristic of a capital-light business model?

Which business model feature most directly enables tiered pricing across small and large customers?

A firm�s business model claims differentiation via proprietary technology but routinely outsources product design and IP to vendors. What should the analyst question?

Which approach to estimating target capital structure is mentioned in the chapter as commonly used by analysts?

Which of the following is a practical reason managers use book values rather than market values when setting target capital structure?

Which of the following best summarizes why business model understanding matters for credit and equity analysts?