Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 1K views

    The External Factor Evaluation (EFE) and Competitive Profile (CPM) Matrices

    Uploaded by

    Anonymous vdOKfvYkp
    The External Factor Evaluation (EFE) and Competitive Profile (CPM) matrices

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    The External Factor Evaluation (EFE) and Competitive Profile (CPM) Matrices

    Uploaded by

    Anonymous vdOKfvYkp
    1K views12 pages
    The External Factor Evaluation (EFE) and Competitive Profile (CPM) matrices

    Original Title

    The External Factor Evaluation (EFE) and Competitive Profile (CPM) matrices

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The External Factor Evaluation (EFE) and Competitive Profile (CPM) matrices

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    1K views12 pages

    The External Factor Evaluation (EFE) and Competitive Profile (CPM) Matrices

    Uploaded by

    Anonymous vdOKfvYkp
    The External Factor Evaluation (EFE) and Competitive Profile (CPM) matrices

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    You are on page 1of 12

    The External Factor

    Evaluation (EFE)
    and Competitive
    Profile (CPM)
    matrices

    External Factor Evaluation Matrix


    (EFE)
    The EFE is a strategic-management tool often used for assessment of

    current business conditions.

    It is a good tool to visualize and prioritize the opportunities and


    threatsthat a business is facing.

    The EFE matrix is concerned solely withexternalfactors.

    Externalfactors assessed in the EFE matrix are the ones that are
    subjected to the will of social, economic, political, legal, and other
    externalforces.

    Creating an EFE Matrix


    1.

    List Factors: Gather a list ofexternalfactors. Divide factors into two


    groups - opportunities and threats.

    2.

    Assign Weights: Assign a weight to eachfactor.The value of each


    weight should be between 0 and 1 or 100. Zero means the factor is not
    important. One or hundred means that the factor is the most influential
    and critical one. The total value ofall weights together should equal 1
    or 100.

    3.

    Rate Factors: Assign a rating to each factor. Rating should be between


    1 and 4. Rating indicates how effective the firms current strategies
    respond to the factor. 1 = the response is poor. 2 = the response is
    below average. 3 = above average. 4 = superior. Weights are industryspecific. Ratingsare company-specific.

    4.

    Multiply weights by ratings: Multiply each factor weight with its


    rating. This willcalculate theweighted scorefor each factor.

    5.

    Total all weighted scores: Addall weighted scores for each factor.
    This will calculate thetotal weighted scorefor the company.

    Copyright 2013 Pearson Education

    External factors can be grouped


    into the following groups:
    Social,

    cultural, demographic, and environmental variables

    Economic
    Political,

    examples are

    variables

    government, business trends, and legal variables

    Copyright 2013 Pearson Education

    Copyright 2013 Pearson Education

    Copyright 2013 Pearson Education

    Competitive Profile Matrix (CPM)

    CPM is a powerful strategic analysis tool.

    It allows business owners, stockholders and other interested


    parties to see the strengths and weaknesses of all major
    competitors in an industry on a single page.

    The tool can rank companies in terms of the "total package" they
    bring to the table. This allows a manager or business owner to
    identify the strongest competitors as well as the areas where the
    business most needs to improve.

    Using the tool


    1.

    Identify the critical success factors: To make it easier, use a list of CSFs and
    include as many factors as possible

    2.

    Assign the weights: The best way to identify what weights should be assigned to
    each factor is to compare the best and worst performing companies in the industry.
    Well performing companies will usually undertake activities that are significant for
    success in the industry.

    3.

    Assign the ratings: Ratings should be assigned using benchmarking or during team
    discussions.

    4.

    Compare the scores and take action: Compare the scores on each factor to
    identify where companys relative strengths and weaknesses are.

    Example

    Android is the strongest player in the


    industry with relative strengths in market
    share, distribution channels,
    customization features, openness and
    cloud integration.

    iOS prevails in frequency updates,


    marketing capabilities and the rate of OS
    crashes.

    Windows Phone is the weakest of them all


    and doesnt have any relative strengths
    against its rivals.

    The companies should create their


    strategies according to their strengths
    and weakness and improve their ratings
    in the most significant industrys areas.

    References

    http://www.maxi-pedia.com/efe+matrix+external

    http://smallbusiness.chron.com/cpm-matrix-do-67032.html

    http://www.strategicmanagementinsight.com/tools/competitiveprofile-matrix-cpm.html

    You might also like