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IE Analysis

This milestone assessment is used as an alternative to SWOT analysis. It can be informed by the internal and external analyses from previous lessons, such as VRIO, PESTEL, and Porter’s Five Forces. It demonstrates CLO 8 and is used to create a draft section that can be used for the Final Assessment Project.

What do I want you to do?

Internal Factor Analysis

1. Create a table to analyze your selected company. In the first column, list 10 key performance indicators or critical success factors that are important in your company’s industry today.
2. In the second column, determine a weight of each of the factors in the first column in terms of how significant they are for success in the company’s industry, totaling 100%.
3. In the third column, determine how well your company is achieving these factors by rating it 1-4, where one means major weakness; two means minor weakness; three means minor strength; and four means major strength.
4. Create a fourth column multiplying the weight and the rating.
5. Total the sum of the fourth column in a new row below it.

External Factor Analysis

1. Create another table. In the first column, list 10 opportunities and threats found in your company’s industry today. (Look for influences in your PESTEL and Porter’s Analyses.)
2. In the second column, determine a weight of each of the factors in the first column in terms of how significant they are for success in the company’s industry, totaling 100%.
3. In the third column, determine how well your company has responded to these factors in recent years by rating it 1-4, where one means poor response; two means a slightly below average response; three means a slightly above average response; and four means superior response.
4. Create a fourth column multiplying the weight and the rating.
5. Total the sum of the fourth column in a new row below it.

IE Matrix

1. Create a grid with internal factor strength on the x-axis and external factor adaptability on the y-axis. Include markings on the axes from 0-4.
2. Add horizontal and vertical lines to the respective axes to create a 3×3 grid at the 1.33 and 2.66 marks.
3. Plot the fourth column total from the internal factor analysis on the x-axis.
4. Plot the fourth column total from the external factor analysis on the y-axis.
5. Draw the intersection of these two points, and label the intersecting point as the current position of our company.
6. Identify the recommended strategy for your company via its position in the 3×3 matrix as follows:

Evaluation: High Adaptability, Low Strength Strategy: Build or Ally to Maintain Market Penetration Product Development Cooperative Strategies	Evaluation: High Adaptability, Medium Strength Strategy: Grow or Build Selectively Market Penetration Product Development Related Diversification	Evaluation: High Adaptability, High Strength Strategy: Grow and Build Vertical or Horizontal Integration Market Penetration Market Development Product Development Related or Unrelated Diversification
Evaluation: Medium Adaptability, Low Strength Strategy: Is it worth improving? Ally or Divest	Evaluation: Medium Adaptability, Medium Strength Strategy: Maintain Market Penetration Product Development	Evaluation: Medium Adaptability, High Strength Strategy: Build or Harvest Selectively Market Penetration Product Development
Evaluation: Low Adaptability, Low Strength Strategy: Retrenchment Divestment	Evaluation: Low Adaptability, Medium Strength Strategy: Is it worth keeping? Harvest or Divest	Evaluation: Low Adaptability, High Strength Strategy: Maintain to Defend While It Lasts Market Penetration Product Development Retrenchment

Why do I want you to do it?

This tool provides an alternative to SWOT. It is also used to draft a component of the Final Assessment Project

How do I want you to do it?

1. What format(s) should the assessment be in?
   1. Include a table for the internal factor analysis, a second table for the external factor analysis, and a grid for the IE matrix.
2. What tools or resources might be needed/useful?
   1. Your previous PESTEL, Porter’s Five Forces, and SWOT analyses.
   2. Here is a link with a similar methodology, with links to internal and external methods within it. Maxi-Pedia. (2023). Internal-external (IE) matrix. http://www.maxi-pedia.com/internal+external+ie+matrix
   3. Citations for resources listed in links within the instructions:
      • Twin, A. (2022, August 17). Key performance indicator (KPI): Meaning, types, examples. https://www.investopedia.com/terms/k/kpi.asp
      • Piyu. (2019, September 18). Difference between CSF and KPI. Difference Between.com. https://www.differencebetween.com/difference-between-csf-and-kpi/

What to include in your submission

Your assignment submission should include:

1. Internal Analysis
2. External Analysis
3. IE Matrix