Exam

Name___________________________________

1.
Unlike the brick-and-mortar marketplace, the failure rate for online companies is low.
Answer:
True

False
Dif: 1
Type: TF
Page Ref: 49-38
Objective:

2.
Online businesses may be pure play companies or click-and-mortar companies that add online projects, such as e-
procurement or selling online, as additional marketing channels.
Answer:

True
False
Dif: 1
Type: TF
Page Ref: 49-38
Objective:

3.
Many good ideas and realistic initiatives have failed because of poor execution due to the lack of sufcient business skills
by the owners or principals of the business.
Answer:

True
False
Dif: 2
Type: TF
Page Ref: 49-40
Objective:

4.
As a general guideline, although virtually anything is available for sale on the Internet, the degree of sales success is
somewhat dependent on the type of item or service being ofered for sale and how it can be delivered.
Answer:

True
False
Dif: 2
Type: TF
Page Ref: 49-40
Objective:

5.
Medium and large businesses, or those seeking external funding, must have an informal business plan.
Answer:
True

False
Dif: 1
Type: TF
Page Ref: 49-41
Objective:

6.
Planning an online business is similar to planning for any startup venture in that it centers on a business plan.
Answer:

True
False
Dif: 1
Type: TF
Page Ref: 49-41
Objective:

7.
The primary reason an entrepreneur writes a business plan is to acquire funding from a bank, an angel investor, a venture
capitalist, or the fnancial markets.
Answer:

True
False
Dif: 2
Type: TF
Page Ref: 49-41
Objective:

8.
Some entrepreneurs may simply invest personal funds from savings, personal lines of credit, or a house mortgage since
these sources of "bootstrap funding" are typically enough.
Answer:
True

False
Dif: 2
Type: TF
Page Ref: 49-43
Objective:

9.
When the entrepreneur's personal funds are insufcient, the entrepreneur will go to friends, family members, or to
fnancial institutions.
Answer:
True

False
Dif: 2
Type: TF
Page Ref: 49-43
Objective:

10.
An important source of fnancial support or direct funding for pre-VC (venture capital) frms is an incubator.
Answer:

True
False
Dif: 2
Type: TF
Page Ref: 49-43
Objective:

11.
Venture capitalists tend to invest in companies that have identifed what seems to be an outstanding business opportunity,
have taken some action to make the opportunity happen, such as written a new software application or secured a patent,
and need an infusion of funds and management expertise to expand and launch the business.
Answer:

True
False
Dif: 2
Type: TF
Page Ref: 49-43
Objective:

12.
There is a serious downside for start-up businesses that acquire venture capital because they lose control over the
business.
Answer:
True

False
Dif: 2
Type: TF
Page Ref: 49-44
Objective:

13.
Once the company is well known and successful, it can go to a stock exchange to raise money via an initial public ofer
(IPO).
Answer:

True
False
Dif: 2
Type: TF
Page Ref: 49-44
Objective:

14.
An e-business transformation is solely about technology.
Answer:
True

False
Dif: 1
Type: TF
Page Ref: 49-46
Objective:

15.
Organizational transformation is a comprehensive concept that implies not only a major change, but also a sharp break
from the past.
Answer:

True
False
Dif: 2
Type: TF
Page Ref: 49-46
Objective:

16.
Business process management (BPM) systems monitor the execution of the business processes so that managers can
analyze and change processes in response to data, rather than on just a hunch.
Answer:

True
False
Dif: 2
Type: TF
Page Ref: 49-47
Objective:

17.
Transforming an existing business to an e-business means a manager must change business processes, but not the way
people work or communicate.
Answer:
True

False
Dif: 2
Type: TF
Page Ref: 49-48
Objective:

18.
An informational Web site provides opportunities for the customers and the business to communicate and share
information.
Answer:
True

False
Dif: 2
Type: TF
Page Ref: 49-48
Objective:

19.
Selecting a domain name is an important marketing and branding consideration for a business because it will be the
business's online address and create an identity for the business.
Answer:

True
False
Dif: 2
Type: TF
Page Ref: 49-53
Objective:

20.
Up-to-the-minute dynamic content is what attracts new and returning customers ("eyeballs") and makes them stay longer
("stickiness"), which builds customer loyalty.
Answer:

True
False
Dif: 2
Type: TF
Page Ref: 49-55
Objective:

21.
Timeliness, efciency, and coverage are three key benefts of RSS.
Answer:

True
False
Dif: 2
Type: TF
Page Ref: 49-57
Objective:

22.
Directed content is Web content that is prepared to match the needs and expectations of the individual visitor.
Answer:
True

False
Dif: 2
Type: TF
Page Ref: 49-57
Objective:

23.
An e-newsletter is a collection of short, informative articles sent at regular intervals by e-mail to individuals who have an
interest in the newsletter's topic.
Answer:

True
False
Dif: 2
Type: TF
Page Ref: 49-58
Objective:

24.
Not receiving a clear mandate for the top to proceed is a common management pitfall.
Answer:

True
False
Dif: 2
Type: TF
Page Ref: 49-59
Objective:

25.
The goal of any website is to deliver quality content to its intended audience and to do so with an elegant design.
Answer:

True
False
Dif: 1
Type: TF
Page Ref: 49-61
Objective:

26.
Circular is the most common site structure.
Answer:
True

False
Dif: 2
Type: TF
Page Ref: 49-63
Objective:

27.
The simplest navigation aid is the navigation bar.
Answer:

True
False
Dif: 1
Type: TF
Page Ref: 49-65
Objective:

28.
Web site usability means that people who use the Web site can do so quickly and easily to accomplish their tasks and may
also consider such factors as cost-efectiveness and usefulness.
Answer:

True
False
Dif: 1
Type: TF
Page Ref: 49-66
Objective:

29.
The key to efective use of color and graphics is to design the site to match the expectations of the target audience.
Answer:

True
False
Dif: 1
Type: TF
Page Ref: 49-66
Objective:

30.
Card-not-present (CNP) transactions increase the risk and uncertainty of online transactions, which increases transaction
fees to ofset the increased risks.
Answer:

True
False
Dif: 1
Type: TF
Page Ref: 49-68
Objective:

31.
Web analytics is the measurement, collection, analysis, and reporting of Internet data for the purposes of understanding
and optimizing Web usage.
Answer:

True
False
Dif: 1
Type: TF
Page Ref: 49-68
Objective:

32.
Search engine marketing is the use of strategies intended to position a Web site at the top of Web search engines' results,
such as Google.
Answer:
True

False
Dif: 2
Type: TF
Page Ref: 49-68
Objective:

33.
A tracking fle is a simple text message an e-mail program automatically adds to outgoing messages.
Answer:
True

False
Dif: 2
Type: TF
Page Ref: 49-68
Objective:

34.
A corporate collaboration system is a customer service approach that focuses on building long-term and sustainable
customer relationships that add value for the customer and the company.
Answer:
True

False
Dif: 2
Type: TF
Page Ref: 49-69
Objective:

35.
The most common EC project on the Internet is the information portal.
Answer:
True

False
Dif: 2
Type: TF
Page Ref: 49-69
Objective:

36.
When creating a new business, the frst step is to
A)
investigate all existing opportunities.
B)
identify a consumer or business need that is not presently being met.
C)
acquire fnancing needed to make the business successful.
D)
write a business case or plan.
Answer:
B
Dif: 1
Type: MC
Page Ref: 49-38
Objective:

37.
The principle reason for writing a business plan is to
A)
provide an operational framework for the business.
B)
help the founders remember what they are trying to accomplish.
C)
provide strategic direction to employees.
D)
acquire external funding.
Answer:
D
Dif: 1
Type: MC
Page Ref: 49-41
Objective:

38.
A written document that identifes a company's goals and outlines how the company intends to achieve the goals and at
what cost best defnes
A)
business plan.
B)
business objectives.
C)
project plan.
D)
business mission.
Answer:
A
Dif: 1
Type: MC
Page Ref: 49-41
Objective:

39.
A document that justifes the investment of internal, organizational resources in a specifc application or project best
defnes
A)
business plan.
B)
initial feasibility study.
C)
project plan.
D)
business case.
Answer:
D
Dif: 1
Type: MC
Page Ref: 49-41
Objective:

40.
A(n) ________ is a wealthy individual who contributes personal funds and possibly expertise at the earliest stage of
business development.
A)
angel investor
B)
venture capitalist
C)
incubator
D)
entrepreneur
Answer:
A
Dif: 1
Type: MC
Page Ref: 49-43
Objective:

41.
A(n) ________ is a company, university, or nonproft organization that supports promising businesses in their initial stages
of development.
A)
angel
B)
entrepreneur
C)
venture capitalist
D)
incubator
Answer:
D
Dif: 2
Type: MC
Page Ref: 49-43
Objective:

42.
________ is money invested in a business by an individual or a group of individuals in exchange for equity in the
business.
A)
Advancement
B)
Venture capital
C)
Start-up funding
D)
Operating capital
Answer:
B
Dif: 1
Type: MC
Page Ref: 49-43
Objective:

43.
The greatest difculty in dealing with venture capital is
A)
the loss of control a venture capitalist demands.
B)
fnding a willing venture capitalist.
C)
relocating the business to an incubator.
D)
fnding the money a venture capitalist will require.
Answer:
B
Dif: 1
Type: MC
Page Ref: 49-44
Objective:

44.
The relationship between stock price and when an investor invests is that
A)
the entrepreneur will pay the highest price per share.
B)
IPO investors will pay the highest price per share.
C)
the venture capitalist will pay the highest price per share.
D)
the angel investor will pay the highest price per share.
Answer:
B
Dif: 2
Type: MC
Page Ref: 49-44
Objective:

45.
Chaplin's Pet Store has been in business for many years. Chaplin, the present owner, decides to open an online sales
channel where he can advertise and sell the same gourmet pet food. This is an example of adding
A)
a webstore.
B)
e-procurement.
C)
a reverse auction.
D)
a portal.
Answer:
A
Dif: 2
Type: MC
Page Ref: 49-45
Objective:

46.
Reprise Electronics, a conglomerate that manufactures and sells all kinds of electronic goods under several brand names,
currently has separate Web sites for each of its brands. The company decides to bring all of the Web sites together through
a single site that, in addition to providing links to the brand pages, will also provide general information about how to
select electronic merchandise and informational pages about the Reprise company and its management team. This is an
example of adding
A)
e-procurement.
B)
a storefront.
C)
a portal.
D)
a reverse auction.
Answer:
C
Dif: 2
Type: MC
Page Ref: 49-45
Objective:

47.
In an organizational transformation
A)
there is a change in outlook, but rarely a change in procedures or investment in infrastructure.
B)
there is always a sharp break with the past and every aspect of the business will probably change.
C)
there are incremental changes to the way things have always been done.
D)
the change may afect only one or a few of the functional areas of the business.
Answer:
B
Dif: 2
Type: MC
Page Ref: 49-46
Objective:

48.
A method for business restructuring that combines workfow systems and redesign methods; it covers people-to-people,
systems-to-systems, and systems-to-people interactions. This description best describes
A)
content management.
B)
business process management.
C)
business process reengineering.
D)
information architecture management.
Answer:
B
Dif: 2
Type: MC
Page Ref: 49-47
Objective:

49.
A(n) ________ Web site does little more than provide information about the business and its products.
A)
dynamic
B)
interactive
C)
transactional
D)
informational
Answer:
D
Dif: 2
Type: MC
Page Ref: 49-48
Objective:

50.
A website that provides opportunities for the customers and the business to communicate and share information best
defnes
A)
social-oriented website.
B)
informational website.
C)
hosting website.
D)
interactive website.
Answer:
D
Dif: 2
Type: MC
Page Ref: 49-48
Objective:

51.
Website features that attract and interact with visitors in the target stakeholder group best defnes
A)
swag.
B)
e-trinkets.
C)
e-goodies.
D)
attractors.
Answer:
D
Dif: 2
Type: MC
Page Ref: 49-49
Objective:

52.
A website that sells products and services best describes
A)
commercial website.
B)
transactional website.
C)
collaborative website.
D)
social-oriented website.
Answer:
B
Dif: 2
Type: MC
Page Ref: 49-49
Objective:

53.
A site that allows business partners to collaborate best defnes
A)
social website.
B)
transactional website.
C)
attractive website.
D)
collaborative website.
Answer:
D
Dif: 2
Type: MC
Page Ref: 49-49
Objective:

54.
A site that provides users online tools for communication and sharing information on common interests best defnes
A)
transactional website.
B)
incorporated website.
C)
collaborative website.
D)
social-oriented website.
Answer:
D
Dif: 2
Type: MC
Page Ref: 49-49
Objective:

55.
A hosting service that provides disk space and services to help small and microbusinesses build a website quickly and
cheaply best defnes
A)
collaborative service.
B)
storebuilder service.
C)
enhanced service.
D)
commercial service.
Answer:
B
Dif: 2
Type: MC
Page Ref: 49-51
Objective:

56.
A(n) ________ site is an exact duplicate of the original Web site physically located on a Web server on another continent or
in another city.
A)
hot
B)
mirror
C)
download
D)
backup
Answer:
B
Dif: 2
Type: MC
Page Ref: 49-52
Objective:

57.
A dedicated website hosting company that ofers a wide range of hosting services and functionality to businesses of all
sizes best defnes
A)
collaboration service.
B)
enhanced service.
C)
application service provider.
D)
web hosting service.
Answer:
D
Dif: 2
Type: MC
Page Ref: 49-52
Objective:

58.
The Web hosting option under which the business acquires the hardware, software, staf, and dedicated
telecommunications services needed to host a Web site is called
A)
using a storebuilder.
B)
ISP hosting.
C)
self-hosting.
D)
mirror hosting.
Answer:
C
Dif: 2
Type: MC
Page Ref: 49-53
Objective:

59.
A hosting service that provides an independent, stand-alone website for small and medium-sized businesses best defnes
A)
ISP hosting service.
B)
voucher service.
C)
collaborative service.
D)
localized service.
Answer:
A
Dif: 2
Type: MC
Page Ref: 49-53
Objective:

60.
The ________ is the name-based address that identifes an Internet-connected server.
A)
IP address
B)
domain name
C)
URL name
D)
host name
Answer:
B
Dif: 2
Type: MC
Page Ref: 49-53
Objective:

61.
A hierarchical naming system for computers, services, or any resource participating in the Internet best defnes
A)
hierarchical structure.
B)
IP address.
C)
domain name system.
D)
specifc name system.
Answer:
C
Dif: 2
Type: MC
Page Ref: 49-54
Objective:

62.
The text, images, sound, and video that make up a Web page best defnes
A)
content.
B)
profle.
C)
design.
D)
metadata.
Answer:
A
Dif: 1
Type: MC
Page Ref: 49-54
Objective:

63.
A major entertainment company has four studios that have been in the same location for more than ten years. The
company includes a page on its Web site with addresses, phone numbers, and general e-mail addresses for each of these
studios. None of this information has changed since the Web site was developed. This is an example of ________ content.
A)
organizational
B)
dynamic
C)
static
D)
functional
Answer:
C
Dif: 1
Type: MC
Page Ref: 49-55
Objective:

64.
Ofering similar or complementary products and services to increase sales best defnes
A)
up-selling.
B)
supplemental selling.
C)
down-selling.
D)
cross-selling.
Answer:
D
Dif: 1
Type: MC
Page Ref: 49-55
Objective:

65.
Creating content that ofers upgraded or more expensive versions of the product is called
A)
comment.
B)
cross-selling.
C)
up-selling.
D)
promotion.
Answer:
C
Dif: 2
Type: MC
Page Ref: 49-55
Objective:

66.
Reviews, testimonials, expert advice, or further explanation about the product are called
A)
up-selling.
B)
promotion.
C)
cross-selling.
D)
comment.
Answer:
D
Dif: 2
Type: MC
Page Ref: 49-56
Objective:

67.
The sale of the same good to many customers, who then integrate it with other oferings and resell it or give it away free
best defnes
A)
syndication.
B)
up-selling.
C)
collaborative selling.
D)
really simple syndication.
Answer:
A
Dif: 2
Type: MC
Page Ref: 49-56
Objective:

68.
A form of syndication in which a section of a website is available for other sites to use best defnes
A)
third-party syndication.
B)
complex syndication.
C)
Web syndication.
D)
collaborative syndication.
Answer:
C
Dif: 2
Type: MC
Page Ref: 49-56
Objective:

69.
A family of Web-feed formats used to publish frequently updated digital content best defnes
A)
Java.
B)
XML.
C)
RSS.
D)
HTML.
Answer:
C
Dif: 2
Type: MC
Page Ref: 49-56
Objective:

70.
Secondary content that ofers a coupon, rebate, or special service is called
A)
cross-selling.
B)
promotion.
C)
up-selling.
D)
comment.
Answer:
B
Dif: 1
Type: MC
Page Ref: 49-56
Objective:

71.
A media fle that is distributed over the Internet using syndication feeds for playback on mobile devices and personal
computers best defnes
A)
podcast.
B)
e-delivery.
C)
RSS.
D)
customized view.
Answer:
A
Dif: 2
Type: MC
Page Ref: 49-57
Objective:

72.
The process of adding, revising, and removing content from a website to keep content fresh, accurate, compelling, and
credible best defnes
A)
collaborative efort.
B)
scripting.
C)
content management.
D)
e-editing.
Answer:
C
Dif: 1
Type: MC
Page Ref: 49-58
Objective:

73.
The concept of consistency in Web site design includes making sure that
A)
Web pages look the same no matter which browser a customer is using.
B)
the messages sent to customers who contact the company are consistent.
C)
customers are treated consistently when they contact customer service.
D)
all visitors consistently fnd what they are looking for.
Answer:
A
Dif: 2
Type: MC
Page Ref: 49-62
Objective:

74.
The ________ is how Web pages are organized, labeled, and navigated to support browsing and searching.
A)
Web layout
B)
information architecture
C)
Web design
D)
Web site map
Answer:
B
Dif: 2
Type: MC
Page Ref: 49-63
Objective:

75.
Aids that help visitors fnd the information they need quickly and easily best defnes
A)
site navigation.
B)
cookies.
C)
crumbs.
D)
keystroke logging.
Answer:
A
Dif: 2
Type: MC
Page Ref: 49-65
Objective:

76.
The quality and usefulness of the user's experience when interacting with the website best defnes
A)
efciency.
B)
credibility.
C)
usability.
D)
feasibility.
Answer:
C
Dif: 2
Type: MC
Page Ref: 49-66
Objective:

77.
Banks are more selective about who gets an account for accepting credit cards online because
A)
dot com failures have made banks less willing to work with online companies.
B)
fees are higher for online processing.
C)
online transactions do not produce much revenue for banks.
D)
CNP transactions are less secure and riskier.
Answer:
D
Dif: 2
Type: MC
Page Ref: 49-68
Objective:

78.
In addition to providing an easy mechanism for buying books, the Amazon.com Web site is easily searchable by book title
and author. It also has book reviews and suggests titles based on previous purchase activity. These enhancements make
the Amazon site a favorite for readers. This is an example of
A)
CNP.
B)
using a meta tag.
C)
search engine optimization.
D)
internal Web site promotion.
Answer:
D
Dif: 2
Type: MC
Page Ref: 49-68
Objective:

79.
Options for acquiring storefronts include each of the following except
A)
build them from templates or storebuilders.
B)
build them from components.
C)
build them from scratch.
D)
join a mall.
Answer:
D
Dif: 1
Type: MC
Page Ref: 49-69, 49-72
Objective:

80.
________ ofers one of the most popular storefront packages with three levels of merchant solutions: starter, standard, and
professional.
A)
Amazon.com
B)
Google
C)
eBay
D)
Yahoo!
Answer:
D
Dif: 2
Type: MC
Page Ref: 49-73
Objective:

81.
List and briefy describe the three steps that most new businesses go through.
Answer:
The steps are identify a consumer or business need in the marketplace, investigate the opportunity, and determine the
business owner's ability to meet the need. Many businesses simply begin with a good idea about an innovative way to
meet a need, even needs that are not yet recognized by customers. It is important to develop a business plan to determine
the feasibility and viability of a business opportunity in the marketplace. Assuming that a realistic business opportunity
exists, does the prospective business owner have the ability to convert the opportunity into success?
Dif: 3
Type: ES
Page Ref: 49-38
Objective:

82.
List and briefy discuss funding options for a start-up online business.
Answer:
When the entrepreneur's personal funds are insufcient, the entrepreneur will go to friends, family members, or to angel
investors or incubators. Incubators usually provide support services, whereas angel investors and venture capitalists
provide funds for a prospective online business. The business and business owners usually beneft greatly from these
arrangements, but the funding sources are scarce and competition for funds is stif.
Dif: 2
Type: ES
Page Ref: 49-43, 49-44
Objective:

83.
Identify three common ways to add EC initiatives to the existing business.
Answer:
Storefronts, portals, and e-procurement are common ways to add EC initiatives. Adding an online sales channel is
common in both B2C and B2B. The required investment is fairly low because storefront hosting is available from many
vendors. Adding one or several types of corporate portals for external and/or internal collaboration and communication.
is also common. Adding e-procurement capabilities requires extensive integration (both internally and externally), so an
EC architecture must be in place. Additional EC initiatives are listed on page 15-11.
Dif: 2
Type: ES
Page Ref: 49-45, 49-46
Objective:

84.
List Web site hosting options for an online business and explain why domain names are important.
Answer:
Storebuilder services, ISPs, dedicated Web site hosting services, and self-hosting give online business owners a range of
options in deciding how and where to host the Web site. A well-chosen domain name is an "address for success," a way of
making the site easy to fnd and remember. The domain name is important to developing a brand identity.
Dif: 2
Type: ES
Page Ref: 49-45, 49-53
Objective:

85.
List eleven website design criteria.
Answer:
Website design criteria include navigation, consistency, response time, appearance, quality assurance, availability,
interactivity, content, usability, security, and scalability.
Dif: 2
Type: ES
Page Ref: 49-62
Objective:

1.
FALSE

2.
TRUE

3.
TRUE

4.
TRUE

5.
FALSE

6.
TRUE

7.
TRUE

8.
FALSE

9.
FALSE

10.
TRUE

11.
TRUE

12.
FALSE

13.
TRUE

14.
FALSE

15.
TRUE

16.
TRUE

17.
FALSE

18.
FALSE

19.
TRUE

20.
TRUE

21.
TRUE

22.
FALSE

23.
TRUE

24.
TRUE

25.
TRUE

26.
FALSE

27.
TRUE

28.
TRUE

29.
TRUE

30.
TRUE

31.
TRUE

32.
FALSE

33.
FALSE

34.
FALSE

35.
FALSE

36.
B

37.
D

38.
A

39.
D

40.
A

41.
D

42.
B

43.
B

44.
B

45.
A

46.
C

47.
B

48.
B

49.
D

50.
D

51.
D

52.
B

53.
D

54.
D

55.
B

56.
B

57.
D

58.
C

59.
A

60.
B

61.
C

62.
A

63.
C

64.
D

65.
C

66.
D

67.
A

68.
C

69.
C

70.
B

71.
A

72.
C

73.
A

74.
B

75.
A

76.
C

77.
D

78.
D

79.
D

80.
D

81.
The steps are identify a consumer or business need in the marketplace, investigate the opportunity, and determine the
business owner's ability to meet the need. Many businesses simply begin with a good idea about an innovative way to
meet a need, even needs that are not yet recognized by customers. It is important to develop a business plan to determine
the feasibility and viability of a business opportunity in the marketplace. Assuming that a realistic business opportunity
exists, does the prospective business owner have the ability to convert the opportunity into success?

82.
When the entrepreneur's personal funds are insufcient, the entrepreneur will go to friends, family members, or to angel
investors or incubators. Incubators usually provide support services, whereas angel investors and venture capitalists
provide funds for a prospective online business. The business and business owners usually beneft greatly from these
arrangements, but the funding sources are scarce and competition for funds is stif.

83.
Storefronts, portals, and e-procurement are common ways to add EC initiatives. Adding an online sales channel is
common in both B2C and B2B. The required investment is fairly low because storefront hosting is available from many
vendors. Adding one or several types of corporate portals for external and/or internal collaboration and communication.
is also common. Adding e-procurement capabilities requires extensive integration (both internally and externally), so an
EC architecture must be in place. Additional EC initiatives are listed on page 15-11.

84.
Storebuilder services, ISPs, dedicated Web site hosting services, and self-hosting give online business owners a range of
options in deciding how and where to host the Web site. A well-chosen domain name is an "address for success," a way of
making the site easy to fnd and remember. The domain name is important to developing a brand identity.

85.
Website design criteria include navigation, consistency, response time, appearance, quality assurance, availability,
interactivity, content, usability, security, and scalability.