ISTM 209 EXAM 3 NEWEST 2026 ACTUAL EXAM| ISTM
209 EXAM 3 REVIEW WITH COMPLETE REAL EXAM
QUESTIONS AND CORRECT VERIFIED ANSWERS/
ALREADY GRADED A+| (MOST RECENT!!)
Q1. According to Michael Porter, his competitive forces model
provides:
A) A financial accounting framework for auditing firms
B) A general view of the firm, its competitors, and the firm's
environment
C) A method for designing database schemas
D) A software development lifecycle
Correct Answer: B
Rationale: This is correct because Michael Porter's competitive
forces model provides a general view of the firm, its competitors,
and the firm's environment. As discussed in Chapter 2, the firm's
environment and the dependence of firms on environments are
crucial; Porter's model analyzes the firm's general business
environment .
Q2. Which of the following is NOT one of Porter's five
competitive forces?
A) Buyer Power
1
,B) Threat of Substitute Products
C) Technological Advancement Speed
D) Rivalry Among Existing Competitors
Correct Answer: C
Rationale: This is correct because Porter's five forces are: Buyer
Power, Supplier Power, Threat of Substitute Products or Services,
Threat of New Entrants, and Rivalry Among Existing Competitors.
Technological advancement speed is an environmental factor but
not one of the five core competitive forces .
Q3. The ability of buyers to affect the price they must pay for
an item is known as:
A) Supplier power
B) Buyer power
C) Threat of substitutes
D) Rivalry
Correct Answer: B
Rationale: This is correct because buyer power is the ability of
buyers to affect the price they must pay for an item. High buyer
power means customers can force prices down; low buyer power
means sellers have more pricing control .
2
,Q4. Switching costs are designed to primarily affect which
competitive force?
A) Threat of new entrants
B) Supplier power
C) Buyer power
D) Rivalry among existing competitors
Correct Answer: C
Rationale: This is correct because switching costs make customers
reluctant to switch to another product or service, thereby
reducing buyer power. Loyalty programs and high switching costs
are strategies to retain customers and mitigate their power to
negotiate lower prices .
Q5. A feature of a product or service that customers have
come to expect and that new competitors must offer to survive
is called:
A) A core competency
B) A synergy
C) An entry barrier
D) A value web
Correct Answer: C
Rationale: This is correct because an entry barrier is a feature of
3
, a product or service that customers have come to expect and
entering competitors must offer the same for survival. For
example, a new bank must offer ATMs, online bill paying, and
account monitoring to compete .
Q6. When an organization can significantly increase its
market share by being first to market with a competitive
advantage, this is called:
A) Product differentiation
B) First-mover advantage
C) Market niche strategy
D) Low-cost leadership
Correct Answer: B
Rationale: This is correct because first-mover advantage occurs
when an organization can significantly increase its market share
by being first to market with a competitive advantage. Being
first allows the organization to establish brand recognition and
customer loyalty before competitors enter .
Q7. The process of gathering information about the
competitive environment, including competitors' plans and
products, is known as:
A) Business intelligence
4
209 EXAM 3 REVIEW WITH COMPLETE REAL EXAM
QUESTIONS AND CORRECT VERIFIED ANSWERS/
ALREADY GRADED A+| (MOST RECENT!!)
Q1. According to Michael Porter, his competitive forces model
provides:
A) A financial accounting framework for auditing firms
B) A general view of the firm, its competitors, and the firm's
environment
C) A method for designing database schemas
D) A software development lifecycle
Correct Answer: B
Rationale: This is correct because Michael Porter's competitive
forces model provides a general view of the firm, its competitors,
and the firm's environment. As discussed in Chapter 2, the firm's
environment and the dependence of firms on environments are
crucial; Porter's model analyzes the firm's general business
environment .
Q2. Which of the following is NOT one of Porter's five
competitive forces?
A) Buyer Power
1
,B) Threat of Substitute Products
C) Technological Advancement Speed
D) Rivalry Among Existing Competitors
Correct Answer: C
Rationale: This is correct because Porter's five forces are: Buyer
Power, Supplier Power, Threat of Substitute Products or Services,
Threat of New Entrants, and Rivalry Among Existing Competitors.
Technological advancement speed is an environmental factor but
not one of the five core competitive forces .
Q3. The ability of buyers to affect the price they must pay for
an item is known as:
A) Supplier power
B) Buyer power
C) Threat of substitutes
D) Rivalry
Correct Answer: B
Rationale: This is correct because buyer power is the ability of
buyers to affect the price they must pay for an item. High buyer
power means customers can force prices down; low buyer power
means sellers have more pricing control .
2
,Q4. Switching costs are designed to primarily affect which
competitive force?
A) Threat of new entrants
B) Supplier power
C) Buyer power
D) Rivalry among existing competitors
Correct Answer: C
Rationale: This is correct because switching costs make customers
reluctant to switch to another product or service, thereby
reducing buyer power. Loyalty programs and high switching costs
are strategies to retain customers and mitigate their power to
negotiate lower prices .
Q5. A feature of a product or service that customers have
come to expect and that new competitors must offer to survive
is called:
A) A core competency
B) A synergy
C) An entry barrier
D) A value web
Correct Answer: C
Rationale: This is correct because an entry barrier is a feature of
3
, a product or service that customers have come to expect and
entering competitors must offer the same for survival. For
example, a new bank must offer ATMs, online bill paying, and
account monitoring to compete .
Q6. When an organization can significantly increase its
market share by being first to market with a competitive
advantage, this is called:
A) Product differentiation
B) First-mover advantage
C) Market niche strategy
D) Low-cost leadership
Correct Answer: B
Rationale: This is correct because first-mover advantage occurs
when an organization can significantly increase its market share
by being first to market with a competitive advantage. Being
first allows the organization to establish brand recognition and
customer loyalty before competitors enter .
Q7. The process of gathering information about the
competitive environment, including competitors' plans and
products, is known as:
A) Business intelligence
4
