Entrepreneurship: Successfully Launching New Ventures, 3e (Barringer/Ireland) Chapter 6 Developing an Effective Business Model 1) A ________ is a firm's planor diagram for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the profits it earns. A) feasibility model B) business model C) strategic plan ) business plan !) competitive model Answer" B iff" 1 #age $ef" 1%& 'opic" Business (odels )) *ennifer Barnes has +ust finished writing a business plan for a startup in the medical products industry. ,he has now reached the point where she needs to develop a plan for how her firm will compete, use its resources, structure its relationships, interface with customers, and create value to sustain itself on the basis of the profits it earns. *ennifer needs to establish her firm's" A) tactical plan B) feasibility plan C) business model ) business template !) operating plan Answer" C iff" 1 #age $ef" 1%& 'opic" Business (odels AAC,B" $eflective 'hin-ing .) /n regard to business models, which of the following statements is incorrect0 A) 'here is a standard business model that most firms follow. B) A firm's business model is inherently dependent on the collection of resources it controls and the capabilities it possesses. C) /t is dangerous for a company to assume that it can be successful by simply copying the business model of another firm. ) A firm's business model is its plan or diagram for how it competes. !) /t is often difficult to determine what another firm's business model is. Answer" A iff" ) #age $ef" 1%& 'opic" Business (odels 1 Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all 4) 'he term ________ refers to initiatives, such as 5etfli6 in movie rentals and /7!A in furniture, which revolutioni8e how products are sold in an industry. A) product model modernism B) business model innovation C) feasibility analysis innovation ) value innovation !) opportunity innovation Answer" B iff" ) #age $ef" 1%9 'opic" Business (odels :) 'he ,avvy !ntrepreneurial ;irm feature in Chapter < focuses on three business model innovators" ,un!dison, $ed 3at, and Cater /nternal (edicine. =hat is ,un!dison's business model innovation0 A) to build solar energy platforms in the ocean B) (a-e solar energy a service rather than a product. C) ,ell solar energy e>uipment in ?-its? that consumers can install themselves. ) Create solar energy ?farms? in rural areas and create a new category of ?farmers.? !) Build large solar energy arrays on the outs-irts of cities to provide for a si8eable portion of their energy needs. Answer" B iff" ) #age $ef" 1&1 'opic" Business (odels AAC,B" $eflective 'hin-ing <) =hich of the following is not one of the purposes of a business model0 A) serves as an ongoing e6tension of feasibility analysis B) serves as a template for conducting industry analysis C) focuses attention on how all the elements of a business fit together ) describes why the networ- of participants needed to ma-e a business idea viable is willing to wor- together !) articulates a company's core logic to all sta-eholders Answer" B iff" ) #age $ef" 1&) 'opic" Business (odels %) /n the =eb3ouse e6ample included in Chapter <, =eb3ouse failed because" A) it did not complete a feasibility analysis B) it did not write a complete business plan C) it couldn't motivate its suppliers or customers to participate at a sufficient scale to support the overhead of the business ) it charged too much for its services !) it failed to focus on developing a core strategy Answer" C iff" . #age $ef" 1&. 'opic" Business (odels AAC,B" $eflective 'hin-ing ) Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all &) 'he ________ is the string of activities that moves a product from the raw material stage, through manufacturing and distribution, and ultimately to the end user. A) conse>uence se>uence B) business chain C) meaning chain ) value chain !) worth procession Answer" iff" ) #age $ef" 1&4 'opic" Business (odels 9) =hich of the following is not a ?primary? activity in the value chain0 A) inbound logistics B) mar-eting and sales C) service ) technology development !) outbound logistics Answer" iff" . #age $ef" 1&: 'opic" Business (odels 12) =hich of the following is a ?primary? activity in the value chain0 A) resource procurement B) technology development C) service ) firm infrastructure !) human resource management Answer" C iff" . #age $ef" 1&: 'opic" Business (odels 11) =hich of the following is a ?support? activity in the value chain0 A) outbound logistics B) service C) mar-eting and sales ) operations !) human resource management Answer" ! iff" . #age $ef" 1&: 'opic" Business (odels . Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all 1)) ________ involves a firm's relationship with its suppliers and involves all the activities of receiving, storing, and shipping component parts to the place where they will be added to the final product. A) $esource procurement B) @perations C) @utbound logistics ) 'echnology development !) /nbound logistics Answer" ! iff" ) #age $ef" 1&: 'opic" Business (odels 1.) ________ involves all the activities re>uired to manufacture a product. A) $esource procurement B) Administration C) @perations ) @utbound logistics !) /nbound logistics Answer" C iff" ) #age $ef" 1&: 'opic" Business (odels 14) According to the te6tboo-, by studying a product's or service's value chain an organi8ation can" A) identify ways to create additional value and assess whether it has the means to do so B) determine if it's business plan needs to be revised C) determine if it is cost effective to manufacture the product or sell the service ) determine if an attractive niche mar-et is available !) determine if a product or service will be successful in the mar-etplace Answer" A iff" . #age $ef" 1&< 'opic" Business (odels 1:) 'wo fatal flaws can render a business model untenable from the beginning. 'hese are" A) failure to compete a business plan and failure to get funding B) a complete misread of the customer and utterly unsound economics C) failure to copy the industry leader's business plan and a complete misread of the customer ) failure to complete a business plan and overemphasi8ing the importance of feasibility analysis !) overemphasi8ing the importance of feasibility analysis and utterly unsound economics Answer" B iff" ) #age $ef" 1&< 'opic" Business (odels 4 Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all 1<) 'wo fatal flaws can render a business model untenable from the beginning. 'hese are utterly unsound economics and" A) a complete misread of the customer B) failure to copy the industry leader's business plan C) overemphasis on the importance of feasibility analysis ) overemphasis on the importance of industry analysis !) failure to complete a business plan prior to developing a business model Answer" A iff" ) #age $ef" 1&< 'opic" Business (odels 1%) 'he four components of a firm's business model are" A) mar-eting plan, core strategy, business plan, and customer interface B) core strategy, strategic resources, partnership networ-, and customer interface C) economic environment, social environment, technological environment, and legalAregulatory environment ) opportunity recognition, feasibility analysis, business plan, and human resource plan !) mar-eting plan, operating plan, financial plan, and human resource plan Answer" B iff" ) #age $ef" 1&% 'opic" Components of !ffective Business (odels 1&) =hich of the following is not one of the components of a firm's business model0 A) core strategy B) strategic resources C) partnership networ) business plan !) customer interface Answer" iff" ) #age $ef" 1&% 'opic" Components of !ffective Business (odels 19) 'he =hat =ent =rong0 feature in Chapter < focuses on iContact, a company that set out of build a mobile social networ-. iContact failed because" A) it couldn't find a way to distribute its product B) it couldn't motivate its suppliers or customers to participate at a sufficient scale to ma-e the business profitable C) of a complete misread of its customers ) of utterly unsound economics !) it didn't have a coherent core strategy Answer" A iff" ) #age $ef" 1&% 'opic" Components of !ffective Business (odels AAC,B" $eflective 'hin-ing : Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all )2) *eff (ommer is starting an environmentally friendly lawn and garden service. @ne thing that *eff has wor-ed hard on is determining how his company will compete in the mar-etplace. 'his elements of *eff's business model is referred to as" A) core strategy B) strategic resources C) partnership networ) fulfillment and support !) customer interface Answer" A iff" ) #age $ef" 1&9 'opic" Core ,trategy AAC,B" $eflective 'hin-ing )1) =hich of the following are the primary elements of a startup's core strategy0 A) target customer, fulfillment and support, pricing structure B) suppliers, partners, other -ey relationships C) pricing structure, suppliers, strategic assets ) core competencies, strategic assets, funding model !) mission statement, productBmar-et scope, basis for differentiation Answer" ! iff" ) #age $ef" 1&9 'opic" Core ,trategy ))) Andrew Bowser is in the process of putting together the business model for his startup and is currently wor-ing on his mission statement, productBmar-et scope, and basis for differentiation. Andrew is wor-ing on the ________ component of his business model. A) core strategy B) strategic resources C) partnership networ) customer interface !) feasibility analysis Answer" A iff" ) #age $ef" 1&9 'opic" Core ,trategy AAC,B" $eflective 'hin-ing ).) A firm's ________ describes why it e6ists and what its business model is supposed to accomplish. A) mission statement B) vision statement C) feasibility statement ) duty statement !) responsibility statement Answer" A iff" ) #age $ef" 1&9 'opic" Core ,trategy < Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all )4) A company's ________ defines the products and mar-ets on which it will concentrate. A) tactical analysis B) business mission C) productBmar-et scope ) supplierBbuyer scope !) basis of differentiation Answer" C iff" ) #age $ef" 1&9 'opic" Core ,trategy ):) =hich of the following statement is incorrect regarding the ?core strategy? component of a firm's business model0 A) A firm's core strategy describes how it competes relative to its competitors. B) 'he product a firm chooses has little impact on its core strategy and business model. C) A company's productBmar-et scope defines the products and mar-ets on which it will compete. ) ;rom a broad perspective firms typically choose one of two generic strategies" cost leadership or differentiation. !) 'he generic strategy a firm chooses greatly affects its business model. Answer" B iff" ) #age $ef" 1&9 'opic" Core ,trategy AAC,B" $eflective 'hin-ing )<) ;rom a broad perspective, firms choose one of two generic strategies to position themselves in the mar-etplace. 'hese are" A) high >uality and low cost B) discount pricing and premium pricing C) value and low cost ) cost leadership and differentiation !) cost premium and separation Answer" iff" ) #age $ef" 192 'opic" Core ,trategy )%) 7endra *ohnson is starting a firm in the shoe industry. 3er shoes will be very high >uality and will be priced at the top end of the mar-et. 7endra has chosen the generic strategy referred to as" A) value pricing B) differentiation C) competitive superiority ) separation !) >uality plus Answer" B iff" ) #age $ef" 192 'opic" Core ,trategy AAC,B" $eflective 'hin-ing % Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all )&) *ared 7ing is starting a firm in the electronics games industry, and will produce games similar to popular games on the mar-et, but won't be as sophisticated, and will priced at the low end of the mar-et. *ared has chosen the generic strategy referred to as" A) price reduction B) differentiation C) >uality plus ) cost leadership !) cost differentiation Answer" iff" ) #age $ef" 192 'opic" Core ,trategy AAC,B" $eflective 'hin-ing )9) ;irms that have a ________ strategy strive to have the lowest costs in the industry, relative to competitors' costs, and typically attract customers on that basis. /n contrast, firms using a ________ strategy compete on the basis of providing uni>ue or different products and typically compete on the basis of >uality, service, timeliness, or some other important dimension. A) differentiation, cost leadership B) cost emphasis, >uality leadership C) cost leadership, differentiation ) price reduction, >uality plus !) cost differentiation, >uality plus Answer" C iff" ) #age $ef" 192 'opic" Core ,trategy .2) (atch the business model component with its e6planation" A) core strategyBhow a firm structures and nurtures its partnerships B) customer interfaceBhow a firm ac>uires and uses its resources C) strategic resourcesBhow a firm ac>uires and uses its resources ) partnership networ-Bhow a firm competes !) core strategyBhow a firm interfaces with its customers Answer" C iff" ) #age $ef" 192 'opic" ,trategic $esources .1) onna ,pector is in the process of putting together the business model for her startup and is currently wor-ing on her core competencies and strategic assets. =hich of the component of her business model is onna wor-ing on0 A) core strategy B) strategic resources C) partnership networ) customer interface !) feasibility analysis Answer" B iff" ) #age $ef" 192 'opic" ,trategic $esources AAC,B" $eflective 'hin-ing & Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all .)) A ________ is a resource or capability that serves as a source of a firm's competitive advantage over its rivals. A) foundational competency B) core competency C) distinctive attribute ) center attribute !) core element Answer" B iff" ) #age $ef" 191 'opic" ,trategic $esources ..) ,ony's competence in miniaturi8ation, ell's competence in supply chain management, and Amie ,treet's competence in managing a music download =eb site are e6amples of ________, which serve as each of these respective firm's competitive advantage of their rivals. A) foundational competencies B) core competencies C) core elements ) distinguishing attributes !) foundational attributes Answer" B iff" ) #age $ef" 191 'opic" ,trategic $esources AAC,B" $eflective 'hin-ing .4) ________ is the process of adapting a firm's core competencies to e6ploit new opportunities. A) $esource leverage B) Capacity proficiency C) Ability leverage ) Aptitude embellishment !) Capacity e6tension Answer" A iff" ) #age $ef" 191 'opic" ,trategic $esources .:) ________ are anything rare and valuable that a firm owns. A) 'actical assets B) 'actical properties C) eliberate assets ) ,trategic assets !) @perational assets Answer" iff" ) #age $ef" 191 'opic" ,trategic $esources 9 Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all .<) /n a business model conte6t, the three components of a firm's partnership networ- are" A) business mission, partners, and strategic assets B) core competencies, suppliers, and target customer C) suppliers, partners, and other -ey relationships ) business mission, productBmar-et scope, and basis for differentiation !) pricing structure, fulfillment and support, and target customer Answer" C iff" ) #age $ef" 191 'opic" #artnership 5etwor.%) A supplier is a company that" A) purchases a company's products B) helps a firm put together its networ- of contacts C) provides startups' funding ) provides startups' business advice !) provides parts or services to another company Answer" ! iff" 1 #age $ef" 19) 'opic" #artnership 5etwor.&) 'he networ- of companies that participate in the production of a product, from the ac>uisition of raw materials to the final sale, is referred to as the" A) input chain B) participation chain C) supply chain ) involvement networ!) contribution chain Answer" C iff" ) #age $ef" 19) 'opic" #artnership 5etwor.9) 'he #artnering for ,uccess feature in Chapter < focuses on Cameron 3ughes =in and #artsearch. 'he overarching point of the feature is" A) the best business models do not incorporate partners until the firm is fully established B) the best business model is one that wor-s not only for yourself but elevates your partners C) the best business model allows a firm to coAopt resources from its partners ) its a rare firm that is able to create a successful business model without relying on partners !) an increasing number of business models are relying on the networ- form of partnership Answer" B iff" ) #age $ef" 19. 'opic" #artnership 5etworAAC,B" $eflective 'hin-ing 12 Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all 42) A hub and wheel configuration with a local firm at the hub organi8ing the interdependencies of a comple6 array of firm is referred to as a" A) trade association B) strategic alliance C) networ) +oint venture !) consortia Answer" C iff" . #age $ef" 194 'opic" #artnership 5etwor41) An arrangement between two or more firms that establishes an e6change relationship but has no +oint ownership involved is called a" A) networB) trade association C) consortia ) +oint venture !) strategic alliance Answer" ! iff" ) #age $ef" 194 'opic" #artnership 5etwor4)) A ________ is a group of organi8ations with similar needs that band together to create a new entity to address those needs. A) +oint venture B) networC) consortia ) strategic alliance !) trade association Answer" C iff" ) #age $ef" 194 'opic" #artnership 5etwor4.) @rgani8ations Ctypically nonprofit) that are formed by firms in the same industry to collect and disseminate trade information, offer legal and technical advice, furnish industryArelated training, and provide a platform for collective lobbying. A) strategic alliance B) trade association C) networ) +oint venture !) consortia Answer" B iff" ) #age $ef" 194 'opic" #artnership 5etwor- 11 Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all 44) ________, a relatively new approach to partnering, ta-es place when a service provided comes inside a partner's facilities and helps the partner design and manage its supply chain. A) #ermeating B) /nfiltrating C) #enetrating ) ;ullfilling !) /nsourcing Answer" ! iff" ) #age $ef" 194 'opic" #artnership 5etwor4:) /n a business model conte6t, the three components of a firm's customer interface are target customer, fulfillment and support, and" A) pricing structure B) productBmar-et scope C) basic for differentiation ) strategic assets !) business mission Answer" A iff" ) #age $ef" 19: 'opic" Customer /nterface 4<) A firm's ________ is the limited group of individuals or businesses that it goes after or tries to appeal to. A) target ob+ective B) goal ob+ective C) intention mar-et ) target mar-et !) ob+ect mar-et Answer" iff" ) #age $ef" 19: 'opic" Customer /nterface 4%) Dary ,mith +ust launched a firm in the sports drin- industry. 3e has decided to focus his efforts on appealing to e6treme sports enthusiasts Ce6amples include hang gliders, roc- climbers, and parachutists). /n Dary's case, e6treme sports enthusiasts represent his firm's" A) target ob+ective B) target mar-et C) goal ob+ective ) intention mar-et !) ob+ect mar-et Answer" B iff" ) #age $ef" 19: 'opic" Customer /nterface AAC,B" $eflective 'hin-ing 1) Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all 4&) 'he clothing retailer Abercrombie E ;itch targets 1&A to ))AyearAold men and women. 'his demographic is Abercrombie E ;itch's" A) target ob+ective B) ob+ective mar-et C) goal ob+ective ) intention mar-et !) target mar-et Answer" ! iff" ) #age $ef" 19: 'opic" Customer /nterface AAC,B" $eflective 'hin-ing 49) ________ describes the way a firm's product or service ?goes to mar-et.? A) ;ulfillment and support B) !6ecution and discharge C) Achievement and discharge ) /mplementation and maintenance !) !6ecution and maintenance Answer" A iff" ) #age $ef" 19< 'opic" Customer /nterface :2) ;ulfillment and support describes" A) how a firm manages its customer relationships B) the way a firm's product or service ?goes to mar-et? or how it reaches its customers C) how a firm manages its employees ) the products and mar-ets on which a firm will compete !) how a firm competes relative to its competitors Answer" B iff" ) #age $ef" 19< 'opic" Customer /nterface :1) A business model is a firm's plan or diagram for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the profits it earns. Answer" '$F! iff" 1 #age $ef" 1%& 'opic" Business (odels :)) A firm's business model resides within its own boundaries. Answer" ;AG,! iff" 1 #age $ef" 1%& 'opic" Business (odels :.) Almost all firms partner with others to ma-e their business models wor-. Answer" '$F! iff" ) #age $ef" 1%& 'opic" Business (odels 1. Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all :4) 'heir is a standard business model that most startups follow. Answer" ;AG,! iff" ) #age $ef" 1%9 'opic" Business (odels ::) A clearly articulated business model serves as an ongoing e6tension of feasibility analysis. Answer" '$F! iff" ) #age $ef" 1&) 'opic" Business (odels :<) By studying a product's value chain, an organi8ation can identify ways to create additional value and assess whether it has the means to do so. Answer" '$F! iff" ) #age $ef" 1&4 'opic" Business (odels :%) 'he support activities in a firm's value chain include" inbound logistics, operations, outbound logistics, mar-eting and sales, and service. Answer" ;AG,! iff" ) #age $ef" 1&: 'opic" Business (odels :&) 'wo fatal flaws can render a business model untenable from the beginning" a complete misread of the customer and utterly unsound economics. Answer" '$F! iff" ) #age $ef" 1&< 'opic" Business (odels :9) 'he four components of an effective business model include" core strategy, strategic resources, partnership networ-, and customer interface. Answer" '$F! iff" ) #age $ef" 1&% 'opic" Components of !ffective Business (odels <2) ;ortunately, if three of the four components of a firm's business model are in place, the firm has a high probability of success. Answer" ;AG,! iff" ) #age $ef" 1&& 'opic" Core ,trategy AAC,B" $eflective 'hin-ing <1) A company's productBmar-et scope defines the products and mar-ets on which it will concentrate. Answer" '$F! iff" ) #age $ef" 1&9 'opic" Core ,trategy 14 Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all <)) 3istorically, it has been difficult for a new venture to use a cost leadership strategy. Answer" '$F! iff" ) #age $ef" 192 'opic" Core ,trategy <.) A core competency is a resource or capability that serves as a source of a firm's competitive advantage over its rivals. Answer" '$F! iff" ) #age $ef" 191 'opic" ,trategic $esources <4) 'he process of adapting a company's core competencies to e6ploit new opportunities is referred to as resource conversion. Answer" ;AG,! iff" ) #age $ef" 191 'opic" ,trategic $esources <:) ,trategic assets are anything rare and valuable that a firm owns. Answer" '$F! iff" ) #age $ef" 191 'opic" ,trategic $esources <<) Companies ultimately try to combine their core competencies and strategic assets to create a sustainable competitive advantage. Answer" '$F! iff" ) #age $ef" 191 'opic" #artnership 5etwor<%) A resource chain is the networ- of all the companies that participate in the production of a product, from the ac>uisition of raw materials to the final sale. Answer" ;AG,! iff" ) #age $ef" 19) 'opic" #artnership 5etwor<&) A networ- is a hubAandAwheel configuration with a local firm at the hub organi8ing the interdependencies of a comple6 array of firms. Answer" '$F! iff" ) #age $ef" 194 'opic" #artnership 5etwor<9) A firm's target mar-et is the limited group of individuals or businesses that it goes after or tries to appeal to. Answer" '$F! iff" ) #age $ef" 19: 'opic" Customer /nterface 1: Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all %2) ;ulfillment and support describes the way a firm's product or service ?goes to mar-et? or how it reaches its customers. Answer" '$F! iff" ) #age $ef" 19< 'opic" Customer /nterface %1) =hat is meant by the statement, ?A firm's business model ta-es it beyond its own boundaries0? #rovide an e6ample to illustrate your answer. Answer" Almost all firms partner with others to ma-e their business models wor-. /n Amie ,treet's case, the venture needs the cooperation of independent musicians, customers, and many others to ma-e its business model possible. ;or e6ample, if the independent musicians who upload music to Amie ,treet's site weren't willing to participate, Amie ,treet would not be able to occupy the uni>ue niche in the music industry that it does. ,imilarly, if it customers weren't willing to be someone what adventurous and embrace Amie ,treet's uni>ue pricing model, that advantage would go away as well. 'he overarching point is that all businesses rely on others to help ma-e their business models wor-. iff" 1 #age $ef" 1%9 AAC,B" $eflective 'hin-ing %)) =hy is it important for a firm to have a wellAthoughtAout business model0 Answer" 3aving a wellAthoughtAout and clearly articulated business model is important for the following reasons" H ,erves as an ongoing e6tension of feasibility analysis. A business model continually as-s the >uestion, ?does the business ma-e sense0? H ;ocuses attention on how all the elements of a business fit together and constitute a wor-ing whole. H escribes why the networ- of participants needed to ma-e a business idea viable is willing to wor- together. H Articulates a company's core logic to all sta-eholders, including the firm's employees. iff" ) #age $ef" 1&) AAC,B" $eflective 'hin-ing %.) escribe the two potential fatal flaws of business models. Answer" 'wo fatal flaws can render a business model untenable from the beginning" a complete misread of the customer and utterly unsound economics. Business models that fall victim to one of these two flaws have lost the race before leaving the starting gate. iff" ) #age $ef" 1&< AAC,B" $eflective 'hin-ing 1< Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all %4) Briefly describe the four main components of a business model. /dentify the subcomponents of each the four main components of a business model. Answer" 'he four main components of a business model are as follows" H Core strategy. 'he first component of a business model is the core strategy, which describes how a firm competes relative to its competitors. 'he core strategy's subcomponents are business mission, productBmar-et scope, and basis for differentiation. H ,trategic resources. A firm is not able to implement a strategy without resources, so the resources a firm has affect its business model substantially. 'he two main subcomponents of a firm's strategic resources are core competencies and strategic assets. H #artnership networ-. A firm's networ- of partnerships is the third component of its business model. 5ew ventures, in particular, typically do not have the resources to perform all the tas-s re>uired to ma-e their business models wor-, so they rely on partners to perform -ey roles. 'he subcomponents in this category are suppliers, partners, and other -ey relationships. H Customer interfacehow a firm interfaces with its customersis the fourth component of a business model. 'he type of customer interface depends on how a firm chooses to compete. 'he subcomponents in this category include target mar-et, fulfillment and support, and pricing strategy. iff" . #age $ef" 1&% %:) =hat is a strategic asset0 #rovide an e6ample of a strategic asset that is utili8ed by an entrepreneurial firm. Answer" ,trategic assets are anything rare and valuable that a firm owns. 'hey include plant and e>uipment, location, brands, patents, customer data, a highly >ualified staff, and distinctive partnerships. A particularly valuable strategic asset is a company's brand. ,tarbuc-s, for e6ample, has wor-ed hard to build the image of its brand, and it would ta-e an enormous effort for another coffee retailer to achieve this same level of brand recognition. iff" ) #age $ef" 191 AAC,B" $eflective 'hin-ing 1% Copyright 1 )212 #earson !ducation, /nc. #ublishing as #rentice 3all