# Internal and External Factor Evaluation Matrix - Explained

What is the IFE Matrix and EFE Matrix

# 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.

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# 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.

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