0: Course Questions

Question 1

A well-designed value proposition def=

Answer 1

The value proposition describes the benefits a firm promises to deliver its customers.

Question 2

the logic behind dominant design

Answer 2

Dominant design describes the main traits of an offering, which emerged as standards and thus are expected by customers.

Question 3

purpose of a business model

Answer 3

It describes the main logic of a company’s business activities

Question 4

Why is “Long Tail” is especially interesting for digital companies?

Answer 4

Applying “Long Tail” is economically feasible for digital companies since marginal costs for additional storage are low.

Question 5

CAPEX vs OPEX

Answer 5

While CAPEX describes upfront costs, OPEX describes on-going costs.

Question 6

business model innovation of Nespresso

Answer 6

Nestlé successfully imitated the “Razor and Blade” business model pattern.

Question 7

How can the revenue mechanism of “Bounties” for Open Source products be described?

Answer 7

Features of open source projects are perceived as valuable and thus stakeholders pay for their development.

Question 8

leads VS customers

Answer 8

Leads are individuals who express interest in buying a product; customers are individuals who buy a product.

Question 9

the logic of Amazon’s cross-selling

Answer 9

Amazon tries to sell complementary goods form a product category.

Question 10

business model pattern “Long tail”: made possible by what economic concept?

Answer 10

Economies of scope

Question 11

From a business model perspective, Tesla’s security software field-updateability is an instance of what?

Answer 11

Tesla offers its customers a digital add-on service in form of a security feature.

Question 12

the key advantage of smartphones in an IoT context

Answer 12

Smartphones take a mediation role between the physical world and the user.

Question 13

best strategy for Co providing a physical product + a digital service

Answer 13

Vendors have a significant interest to maximize usage duration.

Question 14

Referring to Porter’s five forces model, define the term “substitute”

Answer 14

A substitute is an alternative offering that performs the same function for the consumer.

Question 15

Why might the number of suppliers DECREASE/STAY LOW in reality along with the development of IT technologies?

Answer 15

Besides costs of coordination, companies also consider non-contractible incentives of collaboration.

Question 16

effects of IT:

variable reduction =

Answer 16

New advances in IT technologies reduce costs of communication, whereby offerings of high specificity often require more extensive communication.

Question 17

effects of IT:

fixed reduction =

Answer 17

New advances in IT technologies reduce the prices for hardware and software, which reduces overall coordination costs between value chain actors.

Question 18

effects of IT:

reduced specificity =

Answer 18

New advances in IT technologies reduce the specificity of products and allow to more easily generate value with a product based on the 2nd best offering.

Question 19

break-even point def=

Answer 19

the point in time where the realized revenues exceed the costs to offer a new technology

Question 20

3 properties of the tipping point

Answer 20

• The tipping point refers to the point in time where the perceived value to users exceeds the costs to adopt the new technology
• The tipping point refers to the point in time where the realized revenues exceed the costs to offer a new technology
• The tipping point refers to the point in time when the customer base changes from early adopters to a broader user majority incorrect

Question 21

Collaborative filtering

Answer 21

When looking at specific products, visitors of e-commerce websites are usually confronted with recommendations about what other users.

Question 22

Interoperability game

Answer 22

the interoperability of products with other products and as a consequence the lever a company gains from designing its products to be used in combination with many other products. An illustrative example would be Microsoft, with its operation system “windows” that runs on various types of PCs.

Question 23

Bandwagon effect

Answer 23

~hype: there are positive relationships between people adopting a technology and the overall acceptance of the technology, regardless of the underlying evidence, value provided.

Question 24

Content-based filtering VS Collaborative filtering

Answer 24

While the content-based filtering refers to the content as reference point, the collaborative filtering refers to how other users/customers behaved.

Question 25

After a dominant design in a technology life cycle has emerged, what happens?

Answer 25

Shift from product innovation to process innovation.