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The purpose of an external factor evaluation matrix is to analyze the external environment in which the company operates. It is a strategic management tool used to weigh the opportunities and threats that the company faces. The EFE matrix allows companies to understand their competitive position, flexibility, and sustainability to make more informed decisions. The information provided by the EFE matrix results in valuable input to a company's strategy like where to allocate resources, align efforts with the industry's direction and where to focus their research and development. The Alphabet's EFE identifies opportunities like the growing market for Artificial Intelligence. Major competitors of Alphabet are competing in the race to the next Al breakthrough. CEO Sundar Pichai made the decision to layoff hundreds of employees in 2024 in order to reallocate funds to Al advancements. (E. Napolitana, 2024) A major threat for Alphabet Inc threatens their leading subsidiary in the autonomous driving cars, Waymo. The city of San Francisco is suing Waymo for putting a unsafe and dangerous product in the operation. Waymo could be forced to hold off its expansion until the state decides how to govern autonomous vehicles (T. Thadani, 2024). Other states might begin to reconsider how they govern self driving car industry depending on the precedent set by this case