Internal and External Factor Evaluation Matrix - Explained
What is the IFE Matrix and EFE Matrix
Written by J. Mance Gordon
Updated at April 21st, 2024
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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.
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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