The External Factor Evaluation Matrix
External factor evaluation matrix is a strategic management tool which allows the strategists to examine
the cultural, social, economic, demographic, political, legal, and competitive information. EFE matrix indicates
whether the firm is able to effectively take advantage of existing opportunities along with minimizing the external
threats. similarly, it will help the strategists to formulate new strategies and policies on the basis of existing
position of the company.
The scores for an EFE Matrix can range from a low of 1.0 to a high of 4.0. The closer the score is to the
upper range the better the company is internally. With the total weighted average of 2.71, J Fortune Glass and
Aluminum Supply exactly average internally. The score of 2.71 is above average which means that the company is
performing in optimizing the use of opportunities reducing the possibility of threats but there is still enough of
improvement..
Table 3
External Factor Evaluation Matrix for J Fortune Glass And Aluminum Supply
Key External Factors
Weight
Rating
Weighted
Score
Opportunities
1. Number of Residential Building
Construction Increased.
0.15
4
0.60
2. People follow what is in trend than
the traditional style
0.12
4
0.48
3. Cars are not luxury anymore but
necessity
0.10
3
0.30
4. Implementation of R.A. 3127
0.13
3
0.39
0.07
3
0.21
1. Surge of Inflation Rate
0.10
2
0.20
2. The new Auto Tax Reform
0.07
1
0.07
3. Implementation of Philippine
National Standard No. 193 Series of
2005
0.06
1
0.06
4. Glass and Aluminum requires lot of
electricity in producing it
0.10
2
0.20
5. Larger and Older Auto-Glass and
Aluminum Supply.
0.10
2
0.20
Total
1.00
5 Honda Cars and Mercedes-Benz
business units in Clark
Threats
NOTE: The factor weight ranges from 0.0 (not important) to 1.0 (all-important).
While the ratings are as follows: 4= major opportunity, 3= minor opportunity, 2=
minor threat, 1= major threat
2.71