IFE matrix means Internal Factor Evaluation Matrix; is a popular strategic management tool for auditing or evaluating major internal strengths and internal weaknesses in functional areas of an organization or a business.
IFE matrix also provides a basis for identifying or evaluating relationships among those areas. The IFE matrix is used in strategy formulation.
The IFE Matrix together with the EFE matrix is a strategy-formulation tool that can be used to evaluate how an organization or a company is performing in regards to identified internal strengths and weaknesses of an organization or a company. The IFE matrix method conceptually relates to the Balanced Scorecard method in some aspects.
The IFE matrix comprises factors (strengths and weaknesses), weight (0.0 to 1.0), rating (0.0 to 4.00) and finally the weighted score after multiplying weight with rating.
The establishment of the IFE matrix
IFE matrix can be constructed by following those five steps:
1. Construct a list of key factors, determining the success of the organisation's activities. Use 10~20 internal factors, separated between strengths and weaknesses. Be as specific as possible, using percentages, ratios and comparative figures.
2. For each factor, determine Weight in the numerical range, from 0 (not important) to 1 (very important). The sum of all weights must be 1! Weight marks the relative effect of each factor to influence the success or failure of the enterprise in the industry.
3. Assign for each factor a score. An important weakness is represented by 1, 2 for minor weakness, 3 for minor advantage, important advantages are represented by a score of 4. Notably, the score of advantage must be 4 or 3, the score of weakness must be 1 or 2. The score is specific to the company, while the weights are based on industry benchmarks.
4. Multiply the weight of each factor by its score, to obtain the weighted score of each factor.
5. Sum the weighted scores of all the factors, to get the total weighted score of enterprises. As the IFE matrix contains many factors, the total weighted score range is from the lowest 1 to the top 4, the average score being 2.5. Total weighted score significantly lower than the 2.5 of enterprise's signalls that the internal situation is weak, while the score much higher than 2.5 of the enterprise's internal situation is strong. IFE matrix Should contain the 10~20 key factors, number of factors does not affect the total weighted score, because the weight of the sum is always equal to 1.Table of Sekesi. Sekesi company (Civcus-civcus Enterprises) internal evaluation example.