In our example, the company has received total score 2. The numbers range from 4 to 1, where 4 means a superior response, 3 — above average response, 2 — average response and 1 — poor response. Benefits Both matrices have the following benefits: The same process is with ratings.
Do the PEST analysis first. The number indicates how important the factor is if a company wants to succeed in an industry.
Assign the weights and ratings Weights and ratings are assigned subjectively. Assigning of Weight to Each 0 to 1. External Factor Evaluation All the key external factors that are identified in the process of external audit are identified. Multiplication of Weight of Each Factor by its Rating: In the last step of External Factor Evaluation matrix the weighted score of each factor is summed up in order to ascertain the total weighted score for the entire organization.
On the other hand the organization that can give the lowest possible score is always 1. The information from the PEST analysis reveals which factors currently affect or may affect the company in the future.
Each factor in this step should be assigned some rating which ranges from 1 to 4. The organization that has highest possible score is 4. How to overcome the weaknesses that can make the threats a reality? How big is the bargaining power of buyers? Although, this time you or the members of your group will have to decide what ratings should be assigned.
What is the intensity of competitive rivalry? The opportunities are listed first and then the threats are listed.
By perceiving these outside environments, businesses can maximally benefit from the opportunities while minimizing the threats to the organization. When an organization reflects 4.
Both analyses only identify and evaluate the factors but do not help the company directly in determining the next strategic move or the best strategy.
The same situation is with opportunities and threats.the external factor evaluation matrix (efem) For the retail computer store focused upon in this paper, note in Exhibit 1 and 2 respectively that the external and internal assessments for this business are provided.
In the last step of External Factor Evaluation matrix the weighted score of each factor is summed up in order to ascertain the total weighted score for the entire organization. The organization that has highest possible score is & the lowest possible score is while average possible score is By utilizing an External Factor Evaluation Matrix (EFE) a company’s chief strategist can analyze and determine crucial external opportunities and threats important to the future of their organization.
Dec 14, · EFE Matrix is an analytical technique related to the SWOT ultimedescente.com is an acronym of the External Factor Evaluation. EFE Matrix evaluates the external position of /5(). External Factor Evaluation (EFE) Matrix is a strategy tool used to examine company’s external environment and to identify the available opportunities and threats.
Understanding the tool. External Factor Evaluation (EFE) matrix method is a strategicmanagement tool often used for assessment of current business conditions.
The EFE matrix is a good tool to visualize and prioritize the opportunities and threats that a business is facing.5/5(1).Download