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The Strategy Formulation Analytical Framework: External Factor Evaluation (EFE) Matrix
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The Strategy Formulation Analytical Framework
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The Strategy Formulation Analytical Framework: External Factor Evaluation (EFE) Matrix
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The Strategy Formulation Analytical Framework
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Input stage: stage 1 of the strategy-formulation analytical framework that summarizes the basic inputinformation needed to formulate strategies; consists of an EFEM, CPM, and IFEM.Internal-External (IE) Matrix: a 9 quadrant, strategic planning analytical tool that places an org’s variousdivisions as circles in a display (similar to the BCG Matrix) based on two key dimensions: 1. Thesegment’s IFE total weighted scores on the x-axis and 2 the segment’s EFE total weighted scores on the y-axis. The diagram is divided into 3 major regions that have different strategy implications: 1. Grow andbuild or 2 hold and maintain, or 3 harvest or divest.Matching: when an org. matches its internal strengths and weaknesses with its external opportunitiesand threats using, for example, the SWOT, SPACE, BCG, IE, or GRAND Matrices.Matching stage: stage 2 of the strategy-formulation framework that focuses on generating feasiblealternative strategies by aligning internal with eternal factors by utilizing 5 matrices: BCG, IE, SWOT,GRAND, SPACE.
The Decision Stage: The Quantitative Strategic Planning Matrix (QSPM)
Other than ranking strategies to achieve the prioritized list, there is only one analytical technique in the literature designed to determine the relative attractiveness of feasible alternative actions. The Quantitative Strategic Planning Matrix (QSPM), which comprises Stage 3 of the strategy-formulation analytical framework, objectively indicates which alternative strategies are best.6 The QSPM uses input from Stage 1 analyses and matching results from Stage 2 analyses to decide objectively among alternative strategies. That is, the EFE Matrix, IFE Matrix, and CPM that comprise Stage 1, coupled with the SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and Grand Strategy Matrix ...
The Strategy-Formulation Analytical Framework
Important strategy-formulation techniques can be integrated into a three-stage decision-making framework, as shown in Figure 6-2. The tools presented in this framework are applicable to all sizes and types of organizations and can help strategists identify, evaluate, and select strategies.
Figure 6-2
The Strategy-Formulation Analytical Framework
Stage 1 of the strategy-formulation analytical framework consists of the External Factor Evaluation (EFE) Matrix, the Internal Factor Evaluation (IFE) Matrix, and the Competitive Profile Matrix (CPM). Called the input stage ...
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