External Factor Evaluation Matrix generally known as EFE matrix;
is one of the strategic management tool for analyzing and evaluating important external
opportunities and threats in functional parts of a company. This matrix is
exercised in strategy formulation and also grants stage for identifying and
auditing relationship among those parts.
External Factor Evaluation jointly with internal Factor Evaluation matrix
is used to formulate strategies for a business in considering external opportunities
and threats. Weighting from (0.0 to 1.0), and rating (1 to 4) and in
conclusion the weighted score after multiplying weight with rating. Rating is company-specific and Weight is
industry-specific. Rating point out how effectual the company’s current
strategies react to the factors. 1 = the response is poor. 2 = below average. 3
= response is above average. 4 = superior.
The strategy supported by this chart would be
to continue with Amana and their substantial growth while expanding into
Eastern Europe, Asia, and Latin America. The
slow market gain presents a problem but to counteract that Maytag will launch
new product lines and continue to produce sound products. They definitely need
to go overseas to protect it and gain more market share as Haier tries to
embark in their market.
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