Chapter 1

Question 1

Activity

Answer 1

a task performed by a worker in the course of doing his or her job.

Question 2

Bonded warehouse

Answer 2

a secure location where incoming international shipments can be held until customs requirements are satisfied or until payment arrangements are completed.

Question 3

Business model

Answer 3

a set of processes that combine to achieve a company’s goal, which is to yield a profit.

Question 4

Business processes

Answer 4

the group of logical, related, and sequential activities and transactions in which businesses engage.

Question 5

Business-to-business (B2B)

Answer 5

transactions conducted between businesses on the Web.

Question 6

Business-to-consumer (B2C)

Answer 6

transactions conducted between shoppers and businesses on the Web.

Question 7

Business-to-government (B2G)

Answer 7

a category of electronic commerce that includes business transactions with government agencies, such as paying taxes and filing required reports.

Question 8

Business unit

Answer 8

a unit within a company that is organized around a specific combination of product, distribution channel, and customer type. Synonymous with strategic business unit.

Question 9

Commodity item

Answer 9

a product or service that has become so standardized and well-known that buyers cannot detect a difference in the offerings of various sellers; buyers usually base their purchase decisions for such products and services solely on price.

Question 10

Company

Answer 10

a business engaged in commerce; synonymous with firm.

Question 11

Consumer-to-consumer (C2C)

Answer 11

a category of electronic commerce that includes individuals who buy and sell items among themselves.

Question 12

Culture

Answer 12

the combination of language and customs that are unique to a particular population.

Question 13

Customs broker

Answer 13

a company that arranges the payment of tariffs and compliance with customs laws for international shipments.

Question 14

Dot-com

Answer 14

a company that operates only online.

Question 15

Electronic business (e-business)

Answer 15

another term for electronic commerce; sometimes used as a broader term for electronic commerce that includes all business processes, as distinguished from a narrow definition of electronic commerce that includes sales and purchase transactions only.

Question 16

Electronic commerce (e-commerce)

Answer 16

business activities conducted using electronic data transmission over the Internet and the World Wide Web.

Question 17

Electronic data interchange (EDI)

Answer 17

exchange between businesses of computer-readable data in a standard format.

Question 18

Electronic funds transfer (EFT)

Answer 18

electronic transfer of account exchange information over secure private communications networks.

Question 19

E-procurement

Answer 19

synonymous with business-to-business (B2B).

Question 20

Firm

Answer 20

a business engaged in commerce.

Question 21

First-mover advantage

Answer 21

the benefit a company can gain by introducing a product or service before its competitors.

Question 22

Freight forwarder

Answer 22

a company that arranges shipping and insurance for international transactions.

Question 23

Hierarchical business organization

Answer 23

firms that include a number of levels with cumulative responsibility. These organizations are typically headed by a top-level president or officer. A number of vice presidents report to the president. A larger number of middle managers report to the vice presidents.

Question 24

Industry

Answer 24

multiple firms selling similar products to similar customers.

Question 25

Industry value chain

Answer 25

the larger stream of activities in which a particular business unit’s value chain is embedded.

Question 26

Law of diminishing returns

Answer 26

the characteristic of most activities to yield less value as the amount of consumption increases.

Question 27

Localization

Answer 27

a type of language translation that considers multiple elements of the local environment, such as business and cultural practices, in addition to local dialect variations in the language.

Question 28

Machine translation

Answer 28

language translation that is done by software; such translation can reach speeds of 400,000 words per hour.

Question 29

Market

Answer 29

a real or virtual space in which potential buyers and sellers come into contact with each other and agree on a medium of exchange (such as currency or barter).

Question 30

Merchandising

Answer 30

the combination of store design, layout, and product display intended to create an environment that encourages customers to buy.

Question 31

Mobile commerce (m-commerce)

Answer 31

resources accessed using devices that have wireless connections, such as stock quotes, directions, weather forecasts, and airline flight schedules.

Question 32

Network economic structure

Answer 32

a business structure wherein firms coordinate their strategies, resources, and skill sets by forming a long-term, stable relationship based on a shared purpose.

Question 33

Network effect

Answer 33

an increase in the value of a network to its participants, which occurs as more people or organizations participate in the network.

Question 34

Primary activities

Answer 34

activities that are required to do business: design, production, promotion, marketing, delivery, and support of products or services.

Question 35

Procurement

Answer 35

the business activity that includes all purchasing activities plus the monitoring of all elements of purchase transactions.

Question 36

Pure dot-com

Answer 36

a company that operates only online; also called dot-com.

Question 37

Revenue model

Answer 37

the combination of strategies and techniques that a company uses to generate cash flow into the business from customers.

Question 38

Shipping profile

Answer 38

the collection of attributes, including weight and size, that affect how easily a product can be packaged and delivered.

Question 39

Smart phone

Answer 39

a mobile phone that includes a functional Web browser and a full keyboard.

Question 40

Social commerce

Answer 40

the use of interpersonal connections online to promote or sell goods and services.

Question 41

Social networking site

Answer 41

Web sites used by individuals and businesses to conduct social interactions online.

Question 42

Strategic alliance

Answer 42

the coordination of strategies, resources, and skill sets by companies into long-term, stable relationships with other companies and individuals based on shared purpose.

Question 43

Strategic business unit (SBU)

Answer 43

a unit within a company that is organized around a specific combination of product, distribution channel, and customer.

Question 44

Strategic partners

Answer 44

the entities taking part in a strategic alliance.

Question 45

Strategic partnership

Answer 45

synonymous with strategic alliance.

Question 46

Supply management

Answer 46

synonymous with procurement, which is the business activity that includes all purchasing activities plus the monitoring of all elements of purchase transactions?

Question 47

Supporting activities

Answer 47

secondary activities that back up primary business activities. These include human resource management, purchasing, and technology development.

Question 48

SWOT analysis

Answer 48

evaluation of the strengths and weaknesses of a business unit, and identification of the opportunities presented by the markets of the business unit and threats posed by competitors of the business unit.

Question 49

Telecommuting

Answer 49

an employment arrangement in which the employee logs in to the company computer from an off-site location through the Internet instead of traveling to an office.

Question 50

Telework

Answer 50

synonymous with telecommuting.

Question 51

Trading partners

Answer 51

businesses that engage in EDI with one another.

Question 52

Transaction

Answer 52

an exchange of value, such as a purchase, a sale, or the conversion of raw materials into a finished product.

Question 53

Transaction costs

Answer 53

the total of all costs incurred by a buyer and seller as they gather information and negotiate a transaction.

Question 54

Value-added network (VAN)

Answer 54

an independent company that provides connection and EDI transaction forwarding services to businesses engaged in EDI.

Question 55

Value chain

Answer 55

a way of organizing the activities that each strategic business unit undertakes to design, produce, promote, market, deliver, and support the products or services it sells.

Question 56

Value system

Answer 56

synonymous with industry value chain.

Question 57

Vertical integration

Answer 57

the practice of an existing firm replacing one of its suppliers with its own strategic business unit that creates the supplied product.

Question 58

Virtual community

Answer 58

an electronic gathering place for people with common interests.

Question 59

Virtual company

Answer 59

a strategic alliance occurring among companies that operate on the Internet.

Question 60

Web 2.0

Answer 60

technologies that include software that allow users of Web sites to participate in the creation, editing, and distribution of content on a Web site owned and operated by a third party.

Question 61

Wire transfer

Answer 61

synonymous with electronic funds transfer, which is the electronic transfer of account exchange information over secure private communications networks?