Steps in Developing EFE Matrix (External Factors Evaluation Matrix)

&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad1" id&equals;"quads-ad1" style&equals;"float&colon;left&semi;margin&colon;0px 0px 0px 0&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;<p align&equals;"justify">External factors Evaluation matrix &lpar;EFE&rpar; is used to audit the external factors of any company&period; In EFE matrix the external factors are divided into opportunities and threats&period; A company can capitalize on opportunities and avoid or reduced threats&period;<&sol;p>&NewLine;<p align&equals;"justify">Following are the steps to develop EFE matrix&period;<&sol;p>&NewLine;<p align&equals;"justify">1&period; List down the external factors&period;<&sol;p>&NewLine;<p align&equals;"justify">2&period; Categorize factors in opportunities and threats&period;<&sol;p>&NewLine;<p align&equals;"justify">3&period; Assign weight to each factor based on its importance&comma; ranging from 0 &lpar;not important&rpar; to 1&period;0 &lpar;most important&rpar;&period; The sum of weight of factors must be equal to 1&period;<&sol;p>&NewLine;<p align&equals;"justify">4&period; Assign a rating ranging from 1 to 4 to each external factor&period; The rating of each factor shows how promptly firm strategies responding to each opportunity or threat&lpar;1 &equals; response is poor&comma; 4 &equals; response is extremely good&rpar;&period;<&sol;p>&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad2" id&equals;"quads-ad2" style&equals;"float&colon;none&semi;margin&colon;0px 0 0px 0&semi;text-align&colon;center&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;<p align&equals;"justify">5&period; Multiply each factor weight by its rating to get weighted score&period;<&sol;p>&NewLine;<p align&equals;"justify">6&period; Sum the weighted score&period;&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad3" id&equals;"quads-ad3" style&equals;"float&colon;none&semi;margin&colon;0px&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;