University:
California State University, Northridge
Course:
MGT 693 | Strategic Management
Academic year:

2019
Views:

424

Pages:

2
Author:

Carissa Thomas

Internal-External Matrix The Internal External Matrix, often known as the IE matrix, is a suggestive model that is built on a combination of internal and external business aspects. It is another strategic management tool for analyzing a company's working environment and strategic position that is based on EFE matrix and IFE matrix models. The IE matrix is a tool that also falls to strategic portfolio management category. This matrix, similarly to the BCG matrix, divides a company into nine cells and assigns it to a category. The IE matrix is based on the following two criteria: 1. Score from the EFE matrix -- this score is plotted on the y-axis 2. Score from the IFE matrix -- plotted on the x-axis The IE matrix works by drawing a horizontal line across the plane and plotting the total weighted score from the EFE matrix on the y axis. The score generated in the IFE matrix is then plotted on the x axis and a vertical line drawn across the plane. Your strategy is determined by the intersection of your horizontal and vertical lines. This point outlines the approach that your firm should take. An IFE total weighted score of 1.0 to 1.99 on the IE Matrix's x axis indicates a weak internal position. An average score ranges from 2.0 to 2.99. A score of 3.0 to 4.0 is considered excellent. An EFE total weighted score of 1.0 to 1.99 on the y axis is considered low. A medium score ranges from 2.0 to 2.99. A score of 3.0 to 4.0 is considered excellent. The IE matrix is categorized into three major sectors that have different strategy implications. The grow and build strategy are suggested by cells I, II, and III. This demands aggressive and intensive tactical strategies. Market penetration, market development, and product development should be the focus of your strategies. Backward integration, forward integration, and horizontal integration should all be considered from an operational perspective. The hold and maintain strategy are suggested by cells IV, V, and VI. Your tactical plans in this situation should be focused on market penetration and product development. The harvest or divest strategy are suggested by cells VII, VIII, and IX. If the costs of revitalizing the firm are cheap or reasonable, it should be attempted. In other circumstances, aggressive cost management is a strategy for achieving the desired result. EFE Score 4.0 EFE I II III Grow and Build IV V VI Hold and Maintain VII VIII IX Harvest or Divest 2.61 1.0 4.0 2.58 IFE 1.0 IFE Score This IE matrix tells us that Infinitea should hold and maintain its position. The company should pursue strategies focused on increasing market penetration and product development since the result from EFE and IFE fall to average range which are 2.61 and 2.58 respectively.