Question

QUESTION 4 (20)
Illustrate, with examples, the Internal Factor Evaluation (IFE) Matrix and apply it to a retail chain like Woolworths
(Please feel free to make any assumptions but mention these assumptions in your answer)

Answer 1

Internal factor Evaluation (IFE) matrix is a tool which helps in assessing the internal environment of a firm. The tool entails assigning weights to the internal factors of a firm such as the strengths and weaknesses. Weights can be in form of probability or percentages.

While preparing an Internal Factor evaluation for a retail store, the following steps will be used.

1.    Identification of internal factors. I.e. strengths and weaknesses

2.    Assignment of weights for the identified factors

3.    Rating of the factors

4.    Calculation of weighted score (Weight * Rating score)

5.    Calculation of weighted score

6.    Interpretation of the weight indicators

The following assumptions will be made.

1.    The development of the IFE for this paper will be based on Walmart company. This company is selected since its SWOT analysis is available online and is the leading company in the retail sector.

2.    Weight rates from 0 to1, ratings rate from 1 to 4, where:

1 - Minor weakness

2- Major weakness

3- Minor strength

4- Major strengths

The matrix is attached as a table below:

Interpretation of the score

Since the weighed average ranges from a scale of 1 to 4, the average score would be 2.5 {i.e. (1+4)/2}. The total weighted score of 3.2 for Walmart indicates that the retailer is internally stronger than average.

Explanation: