Sample Essay
The External Factor Evaluation Matrix based on the opportunities and the threats faced by the Estee Lauder Companies is depicted below.
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EFE Matrix |
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|
Opportunities |
Weight |
Rating |
Weighted Score |
| Room for expansion |
10% |
3 |
0.3 |
| Wide customer reach |
8% |
4 |
0.32 |
| Access to prospective markets for new products |
8% |
4 |
0.32 |
| Ability and resources to take on additional brands |
7% |
3 |
0.21 |
| Increasing popularity of online shopping |
7% |
4 |
0.28 |
| Ability to buy brands from regional markets |
7% |
3 |
0.21 |
| Premium pricing based on brand value allows for high profits |
8% |
4 |
0.32 |
|
|
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|
Threats |
|
|
|
| Intense competition in the market |
20% |
4 |
0.8 |
| Inadequate R&D due to competition can result in lawsuits |
15% |
3 |
0.45 |
| Restrictive trade policies |
5% |
2 |
0.1 |
| Fluctuations in exchange rate |
5% |
2 |
0.1 |
| Total Weighted Score |
100% |
3.41 |
|
The weighted score of 3.41 on the EFE matrix depicts Estee Lauder has an above average ability.
Essay: External Factor Evaluation Matrix