Welcome to Maxi-Pedia Forum. Maxi-Pedia discussion forum is a free community inviting you to express your ideas and discuss various topics with other contributors.

August 07, 2020, 01:32:33 pm
Most Recent Posts:
 Pages: [1]
Author
Topic:

Need help on EFE matrix

kimlong
Newbie

Posts: 3

 « on: March 08, 2015, 07:57:12 am »

Hi.
I'm a student. My teacher gave me a homework, told me to choose a random company, then create an EFE matrix (External Factor Evaluation matrix).
So far, I've learned how to make one, with a list of external factors needed. But there is a problem I still don't know how to do it. With each factor I listed, I have to define how important the factor is by putting it a rate for "weight" field, and with the "rating" field, I have to put the rating number by scoring from 1 to 4 in it. So, how can I measure the right "weight and rating" number, and what information I need to do that. Any help will be greatly appreciated.
Thank you!
 Logged
Maxi-Pedia Forum

Need help on EFE matrix

« on: March 08, 2015, 07:57:12 am »

 Logged
bugibar
Full Member

Posts: 107

 « Reply #1 on: March 09, 2015, 08:58:01 am »

Weights and rate factors are subjective values, i.e. "educated guess". You can guess them on your own, or as a team decision. In a more sophisticated calculation, they could be result of a survey (you distribute electronic survey to your respondents and they assess the value for you, you then supply to the IFE/EFE model an average value that comes out of the survey). The value of each weight should be between 0 (not important) and 1 (highly important). The total value of all weights together should equal 1 or 100. Rating should be between 1 and 4. Rating indicates how effective the firm’s current strategies respond to the factor. 1 = the response is poor. 2 = the response is below average. 3 = above average. 4 = superior. Weights are specific to the industry. Ratings are specific to the company.
 Logged
kimlong
Newbie

Posts: 3

 « Reply #2 on: March 14, 2015, 04:02:25 pm »

Weights and rate factors are subjective values, i.e. "educated guess". You can guess them on your own, or as a team decision. In a more sophisticated calculation, they could be result of a survey (you distribute electronic survey to your respondents and they assess the value for you, you then supply to the IFE/EFE model an average value that comes out of the survey). The value of each weight should be between 0 (not important) and 1 (highly important). The total value of all weights together should equal 1 or 100. Rating should be between 1 and 4. Rating indicates how effective the firm’s current strategies respond to the factor. 1 = the response is poor. 2 = the response is below average. 3 = above average. 4 = superior. Weights are specific to the industry. Ratings are specific to the company.

Thank you for answering me. So the whole IFE/EFE matrix just base on "educated guess" and done by myself or a team. So how can I know for sure if those guesses are right or wrong?
 Logged
bugibar
Full Member

Posts: 107

 « Reply #3 on: March 18, 2015, 10:16:58 am »

Well, by the definition of "guess", you can't be sure that your guess is correct. But you can increase the probability of it being correct by increasing the number of participants. This can be done with a help of an online survey. There are some online services which you can use to set up online survey and distribute it to even as much as thousands of participants. My personal opinion is that if you get 10 answers, that would give you a pretty confident guess.
 Logged
kimlong
Newbie

Posts: 3

 « Reply #4 on: March 22, 2015, 03:38:11 pm »

Well, by the definition of "guess", you can't be sure that your guess is correct. But you can increase the probability of it being correct by increasing the number of participants. This can be done with a help of an online survey. There are some online services which you can use to set up online survey and distribute it to even as much as thousands of participants. My personal opinion is that if you get 10 answers, that would give you a pretty confident guess.

Well, you're right thank you so much for your help
 Logged
steven
Full Member

Posts: 223

 « Reply #5 on: March 23, 2015, 09:49:45 am »

You could also try to google some information about what rates are being used by rating agencies (Fitch, S&P, etc.). They won't have weights for all your items, but some things such as geo-political riscs are going to be similar.
 Logged
Maxi-Pedia Forum

 Logged
 Pages: [1]
 « previous next »