IFE Matrix

IFE matrix

Internal factors evaluation matrix (IFE) is a tool that uses internal audits report to analyze a firms internal strengths and weaknesses. An IFE matrix gives important information and helps in strategy formulation.

Amazon Overview

Founded in 1994; Started selling books online and now operate Web sites that offer various products and services, which include: music, DVDs, videos, electronics, camera and photography, clothing apparel, shoes, etc. Features include: one-click shopping, customer review and e-mail order verification. The company is in coalition with other retailers and offer various new, refurbished, and used items in categories. Headquarters is in Seattle (Washington) with an additional office in Coffeyville, Kansas. It has six global websites to serve domestic customers in the US, the UK, Germany, France, Japan and Canada

Internal strengths and weaknesses

STRENGTHS:
-

WEAKNESSES:
-

Strong brand name * Large product selection * Pricing policy with discounts Corporate culture High quality management team Customer service support (Highest score in 2002 American Customer Satisfaction Index) Developed and upgraded technology: software and hardware Two segments: B2C and B2B ecommerce.

Low finance performance (high debt level)

Risk of introduction of wrong new categories which could damage companys brand
Companys offered free shipping might affect future financial outcome

Certain products (high volume/weight) have high shipping costs which could confront with local offline retailers
Lack of Spanish website version (Latino and Hispanic Americans are the fastest-growing online ethnic group)

Internal Factors Evaluation Matrix (IFE) Key Internal Factors Weighted Weights Rating Scores 0.0 to 1.0 1 to 4
0.15 0.1 0.07 0.1 0.1 0.05 0.08 4 4 3 4 4 3 4 0.6 0.4 0.21 0.4 0.4 0.15 0.32

Internal Strengths 1. Strong brand name 2. Corporate Culture 3. High quality management team 4. Customer Support Services 5. Effective post sales services 6. Developed and upgraded technology: Software and Hardware 7. High shipping Quality Internal Weaknesses 8. Gradual decrease in profit from 2004-2006 9. Risk associated with unrelated diversification 10. Certain products that are offered have high shipping costs 11. Company offering free shipping might affect future financial outcome 12. Lack of website with Custom languages Totals

0.1 0.1 0.05 0.05 0.05 1

1 2 1 2 2

0.1 0.2 0.05 0.1 0.1 3.03

Major strengths
The main strengths of online retail market in which Amazon operates is the strong brand names and recognition also corporate culture and sales and post sales services are of relative importance, too. The major weakness of this industry is the risk associated with venturing into retailing of products that are unrelated and high shipping cost related to some products. The weighted score of 3.03 (which is greater than 2.5) shows a strong internal position but there are still issues to be sorted out. As in case of Amazon due to high product diversification and venturing into new product markets costs have been high and though net sales have increased since 2004 the net income has significantly decreased. Amazons website lacks an important aspect of having different languages for different regions have also a significant impact on their sales as well over the years.