Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Tutoring
  • Home
  • Business Management & Operations
  • Strategy, Entrepreneurship, & Innovation

Internal and External Factor Evaluation Matrix - Explained

What is the IFE Matrix and EFE Matrix

Written by Jason Gordon

Updated at April 7th, 2022

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

What is the Internal Factor Evaluation Matrix? What is the External Factor Evaluation? What is the Factor Evaluation Process?

What is the Internal Factor Evaluation Matrix? 

The Internal Factor Evaluation Matrix is an analytical technique used to evaluate the strategic position of a firm based upon internal strengths and weaknesses. It is very similar to a SWOT analysis, but with numerical weighting of factors. 

Back to: STRATEGY & PLANNING

What is the External Factor Evaluation? 

The External Factor Evaluation Matrix, similar to the IFE Matrix, is an analytical technique used to evaluate the strategic position of a firm - except that it is based upon external strengths and weaknesses of the firm. Once again, it is very similar to a SWOT analysis, but with numerical weighting of factors. 

What is the Factor Evaluation Process?

The evaluation process:

  1. For the IFE, create a table of the internal factors (strengths and weaknesses) of the firm. For the EFE, create a table of the external factors (strengths and weaknesses) of the firm.
  2. Determine the comparative importance of the various strengths and weaknesses. Assign to each factor a weight somewhere between 0.00 to 1.00. The total of all numbers must equal 1.0 - so number each factor based upon its importance. 
  3. Rate each factors as follows:
    • 4 points - major S
    • 3 points - minor S
    • 2 points - minor W
    • 1 point - major W
  4. Multiply the weight and rating for each factor - the result is a weighted ratio.
  5. Sum of the weighted ratios of individual factors - result is an overall weighted ratio.

The resulting weighted ratio for each analysis provides a numerical evaluation of the internal or external position of the organization. A score close to one shows a strong strategic position. A score close to 1 shows a weak position. 

Related Topics

  • ***Industry Analysis to Build a Strategy***
  • Strategic Analysis
  • SWOT Analysis
  • SPACE Analysis
  • Situational Analysis - 7C
  • Competition Profile Matrix
  • Resources and Capabilities
  • VMOST
  • Core Competency
  • VRIO Analysis
  • Value Chain Analysis
  • Internal Factor Analysis
  • Value Creation Index
  • PEST(LE) Analysis
  • Industry Lifecycle Analysis
  • Industry Lifecycle - Definition
  • Porter's Five Forces
  • Modes of Management
  • External Factor Evaluation

Other Related Topics

  • ***Industry Analysis to Build a Strategy***
  • Strategic Analysis
  • SWOT Analysis
  • SPACE Analysis
  • Situational Analysis - 7C
  • Competition Profile Matrix
  • Resources and Capabilities
  • VMOST
  • Core Competency
  • VRIO Analysis
  • Value Chain Analysis
  • Internal Factor Analysis
  • Value Creation Index
  • PEST(LE) Analysis
  • Industry Lifecycle Analysis
  • Industry Lifecycle - Definition
  • Porter's Five Forces
  • Modes of Management
  • External Factor Evaluation
ife efe internal factor analysis external factor analysis ife matrix efe matrix

Was this article helpful?

Yes
No

Related Articles

  • Brownfield Investment - Explained
  • Bottom Up Forecasting - Explained
  • Manufacturing Production (Strategy) - Explained
  • Methods of Innovation



©2011-2021. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand