Internal Factors Evaluation Matrix (IFE) Key Internal Factors Weig Rati hts ng 0.0 to 1 to 1.0 4 0.15 0.1 0.07 0.1 0.1 0.05 0.

08 4 4 3 4 4 3 4 Weight ed Scores

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

0.6 0.4 0.21 0.4 0.4 0.15 0.32

0.1 0.1 0.05 0.05 0.05

1 2 1 2 2

0.1 0.2 0.05 0.1 0.1

Totals 1 3.03 What Weights mean: 0.0 = least important; 1.0 = most important What Ratings mean: 1 = major weakness; 2 = minor weakness; 3 = minor strength; 4 = major
strength

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

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