Internal and External Factor Evaluation Matrix

The video tutorial explains factor evaluation matrices, tools used to assess a firm's strategic position by analyzing internal and external factors. It compares these matrices to SWOT analysis, highlighting the use of quantitative methods like importance weighting and rating scales. The process involves creating a table of factors, assigning weights, scoring, and evaluating the strategic position. The matrices can be used for both external and internal comparisons, aiding in strategy development and understanding the effectiveness of existing strategies.

What is the primary purpose of using factor evaluation matrices?

• To focus solely on external factors

• To mix internal and external factors for analysis

• To replace SWOT analysis entirely

• To evaluate a firm's strategic position using numerical weightings

How are factors weighted in a factor evaluation matrix?

• Based on their alphabetical order

• Randomly assigned by the analyst

• According to their importance, with a total sum of 1

• By assigning the same weight to all factors

What is the significance of multiplying weightings by ratings in the matrix?

• It ensures all factors have equal impact

• It calculates a score that reflects the strategic position

• It provides a qualitative assessment of the factors

• It helps in identifying the least important factors

How can factor evaluation matrices be used for comparison?

• By evaluating different companies on unrelated factors

• By comparing the same factors across different companies or time periods

• By ignoring the numerical scores

• By focusing only on internal factors

What is a potential benefit of using factor evaluation matrices?

• They are only useful for large corporations

• They focus only on financial metrics

• They provide a clear numerical insight into strategic positions

• They eliminate the need for strategic planning