Question

EZBiz, the brainchild of three college friends, is a startup venture that plans to produce and market sports gear. The venture is still stuck in the planning phase as they have not been able to decide the suitable business strategy to opt for they are currently trying to decide between a bricks-and-clicks strategy and a click-only strategy. Which of the following, if true, would most undermine the decision to adopt a click-only strategy?
A) The company has limited access to funds and is looking to keep its costs low.B) The public is wary of sharing confidential information after a recent spate of credit card scandals.C) A competitor is facing severe backlash after inadvertently releasing sensitive data into the public domain.D) Several companies who have switched from a brick-and-mortar strategy to a click-only strategy are experiencing severe channel conflicts.E) Some click-only companies have been unable to achieve economies of scale and are subsequently unable to offer lower prices.

Answer 1

Answer:

B) The public is wary of sharing confidential information after a recent spate of credit card scandals.

Explanation:

There are several advantages of click-only companies, especially that they are able to offer lower prices since they don't need to support the costs of brick-and-mortar stores.

But the whole idea of selling through the internet is based on the customers' trust on new technologies and they specially dislike when the new technologies fail, e.g. when a hacker discloses the accounts and passwords of millions of users.