Homework 2

1. The costs incurred when a firm buys on the marketplace what it cannot make itself are referred to as (Points : 1)

[pic] switching costs. [pic] transaction costs. [pic] procurement. [pic] agency costs.

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2. Disintermediation (Points : 1)

[pic] results from the speed of the Internet. [pic] is defined as the elimination of layers in the distribution process. [pic] is a result of social networking. [pic] All of the above

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3. The four major types of competitive strategy are: (Points : 1)

[pic] low-cost leadership; substitute products and services; customers; and suppliers. [pic] low-cost leadership; product differentiation; focus on market niche; and customer and supplier intimacy. [pic] new market entrants; substitute products and services; customers; and suppliers. [pic] low-cost leadership; new market entrants; product differentiation; and focus on market niche.

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4. Information asymmetry exists when (Points : 1)

[pic] the network is overloaded. [pic] sellers and buyers have the same information. [pic] one party in a transaction has more important information than the other. [pic] manufactures provide online data to customers.

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5. When a firm provides a specialized product or service for a narrow target market better than competitors, they are using a (Points : 1)

[pic] product differentiation strategy. [pic] market niche strategy. [pic] mass customization strategy. [pic] process efficiency strategy.

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6. Internet technology (Points : 1)

[pic] makes it easy for rivals to compete on price alone. [pic] imposes a significant cost of entry, due to infrastructure requirements. [pic] increases the difference between