FAQ
Internal/External Matrix, IFE & EFE
Note that these responses are not official additions to the theory, only explanations for the cases based on the specific questions received.
1. I'm somewhat confused on the ratings. According to David, the ratings are the current strategies response to the factor ( p. 114). In class, I was under the impression that the ratings for the EFE are based on the industry.
The EFE is an analysis of the environment outside the company as it effects the company. That is an analysis of opportunities and threats. It does NOT consider the company's response. Opportunities and threats could effect only the company or they could effect the entire industry. See EFE - Factor Ratings.
1. & 2. I have a question with the IFE and EFE matrices. For each strength, weakness, opportunity, and threat, I have about a one to two sentence description for each factor. Am I doing this correctly?
Probably. That is long enough, but what counts is the actual words and whether they are clear and specific.
I've been looking through the text to find a definition for economy of scale, but I haven't found one. Will you define this term and give me an example?
Economy of scale or economies of scale. As an organization becomes larger it reduces its costs per unit. I've added a section on the first page for 704 (at the bottom) with some business dictionaries if the term isn't in the David book.
Do I need to write a text for questions 1 & 2 or just the actual matrix and label them as Questions 1 & 2?
You need a table to assign numerical values for the IFE and EFE. If there isn't room in the table to adequately explain the factors, then they need to be explained in the paper.
See Sample Answer With Headers For Question 4 for BUS 704 for a sample 4.B. answer.
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