Internal and External Factor Evaluation Matrix - Explained
What is the IFE Matrix and EFE Matrix
Written by Jason Gordon
Updated at April 14th, 2023
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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:
- 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.
- 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.
- Rate each factors as follows:
- 4 points - major S
- 3 points - minor S
- 2 points - minor W
- 1 point - major W
- Multiply the weight and rating for each factor - the result is a weighted ratio.
- 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.
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