An EFE Matrix allows strategists to summarize and
evaluate economic, social, cultural, demographic, environmental, political,
governmental, legal, technological, and competitive information.
There are five steps in developing an EFE Matrix
as illustrated in Table 3-12.
*
List
key external factors as identified in the external-audit process. Include a
total of 10-20 factors from both the opportunities and threats.
*
Assign
to each factor a weight from .0 (not important) to 1.0 (very important). These
weights show the relative importance. The total of all the weights should equal
1.0.
*
Assign
a 1-4 rating to each factor to indicate how effectively the firm’s current
response strategy: 1= the response is poor, 2 = the response is average, 3 =
the response is above average, and 4 = the response is superior.
*
Multiply
each factor’s weight by its rating to get a weighted score.
*
Sum
the weighted scores for each variable to determine the total weighted score for
the organization.
