8/3/2022

How can we decide which strategies to use?

Internal External (IE) Matrix

EFE= 3.05 IFE= 2.86

1 2

Plot of your IFE

• Based on your IFE and EFE matrix
analysis you can create an Internal-
External matrix.
score on the X
Internal • This is a type of portfolio matrix. axis
External (IE) • IE matrix is based on two key Step 1
Matrix dimensions:
• IFE total weighted score – X axis
And plot your
• EFE score total weighted score – Y
axis
EFE score on the
Y axis

3 4
Total EFE Weighted Score

Total IFE Weighted Score

IFE= 2.86 Draw a straight line
Strong Average Weak
from the plotted
High I
4.0 - 3.0 2.99 -
II
2.0 1.99
III
- 1.0
dots of both axis.
4.0 -

EFE= 3.05
3.0
Step 2
Medium
2.99
IV V VI Highlight the cross
-
2.0
point between
Low
1.99
VII VIII IX those two axis.
- 1.0

5 6

1
 8/3/2022

Total EFE Weighted Score

Total IFE Weighted Score

IFE= 2.86
Depending on
Strong Average Weak where the cross-
4.0 - 3.0 2.99 - 2.0 1.99 - 1.0
High
4.0 -
I II III section, the
EFE= 3.05
3.0
Step 3 matrix will
Medium
2.99
IV V VI recommend
-
2.0 appropriate
Low VII VIII IX
-
1.99
1.0
strategy.

7 8

Grow & Build

Total IFE Weighted Score
*Market penetration, Market development, Hold and Maintain strategy-
Product development, Backward, Forward, IFE= 2.86Market penetration, Product Recommended strategies
Horizontal Integration development
Related Diversification, Unrelated
Total EFE Weighted Score

Diversification
Strong Average Weak I,II,IV : Grow & Build
4.0 - 3.0 2.99 - 2.0 1.99 - 1.0
High I II III • Market penetration, Market development, Product
4.0 - development, Backward, Forward, Horizontal Integration
3.0 Related Diversification, Unrelated Diversification
EFE= 3.05
Medium IV V VI III, V, VII : Hold & Maintain
2.99
- • Market penetration, Product development
2.0

• Defensive Strategy: Low VII VIII IX VI, VIII, IX : Defensive strategy

Retrenchment, 1.99
-
Divestiture, Liquidation 1.0 • Retrenchment, Divestiture, Liquidation

9 10

Any Question

11