Construct an EFE Matrix for an organization of your choice.

Note: There are several examples in the chapter (no duplicate organizations). Compare your response with your peers.

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 20 factors from both the opportunities and threats.

Assign to each factor a weight from 0.0 (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 firms 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 factors 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.