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IFE Matrix

1. Prioritizing the relative importance of strengths and weaknesses in an IFE matrix is important because not all factors contribute equally to an organization's overall strengths and weaknesses. Weighing each factor allows managers to assess their relative impacts. 2. After an internal audit uncovered 100 strengths and weaknesses, the factors could be grouped by level of risk (high, moderate, low). Ranking the most important strengths and weaknesses first ensures the organization addresses the highest priority issues. Reducing the total number of key factors prevents wasting resources on minor issues. 3. Value chain analysis examines the costs associated with each organizational activity, from raw materials to marketing. It helps identify core competencies an organization performs especially well and can

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Jan Gelera
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216 views

IFE Matrix

1. Prioritizing the relative importance of strengths and weaknesses in an IFE matrix is important because not all factors contribute equally to an organization's overall strengths and weaknesses. Weighing each factor allows managers to assess their relative impacts. 2. After an internal audit uncovered 100 strengths and weaknesses, the factors could be grouped by level of risk (high, moderate, low). Ranking the most important strengths and weaknesses first ensures the organization addresses the highest priority issues. Reducing the total number of key factors prevents wasting resources on minor issues. 3. Value chain analysis examines the costs associated with each organizational activity, from raw materials to marketing. It helps identify core competencies an organization performs especially well and can

Uploaded by

Jan Gelera
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Explain, why prioritizing the relative importance of strengths and weaknesses to


include in an IFE Matrix is an important strategic-management activity?

The IFE Matrix assesses the major strengths (S) and weaknesses (W) in the functional areas of
the business. It also provides a basis for identifying and evaluating relationships among those 
areas.
In strategic management, it is important to prioritize each strength and weakness according to 
some weighing scale like (1.0 for all important and 0.0 for not important) because common 
sense says that not all strengths and weaknesses contribute the same effect or weight. 
All the strengths would not each contribute equally to the total strength of the company. 
Similarly, all the weaknesses would not each contribute equally to the total weakness of the co
mpany. Example, a company only hiring graduates from top universities and also top of their
class, the company may expect that these graduates are more efficient and effective. You
certainly would not expect that the “brainpower” contributions from both of them towards the 
company to be the same. So, one must figure out a way to assess their relative contributions.
The important point is that all managers do planning and should involve subordinates in the 
process to facilitate employee understanding and commitment. Lastly,
planning can have a positive impact on organizational and individual performance. 

2. How do you conduct an internal audit?  After conducting an internal audit, a firm
discovers a total of 100 strengths and weaknesses.  What procedures could then be
used to determine the most important of these?  Why is it important to reduce the
total number of key factors?  

An internal audit is a dynamic profession to help companies or organizations achieve set goals
and objectives. It evaluates and improves the effectiveness of risk management, control, and
governance processes. It makes sure that internal business processes are consistent.

The audit report must list all findings in a way that the most important findings are given
priority on the list. Important findings are those that pose the highest risk to various business
processes in an organization if they are not taken care of.

In the case given above, the weaknesses can be divided into the following groups:
 High risk.
 Moderate risk.
 Low risk.

This division should be conducted with respect to the potential consequences that these
weaknesses may cause if necessary steps are not taken to reduce damages in the form of
operational losses and legal issues. Similarly, the most important strengths should be listed first
so that the company can leverage them for maximum productivity and market control.

The total number of key factors should be reduced so that the company can deal with the most
important issues based on priority. This ensures that the company does not waste its resources
and time in dealing with minor issues that are not of much importance to the growth and
success of the company. In this way, issues that need urgent attention are dealt with before
diverting time and other resources to minor issues at the company.

3. Explain Value Chain Analysis (VCA).

Porter describes the business of a firm as a value chain, in which total revenues minus total
costs of all activities undertaken to develop and market a product or service yields value. Now,
Value Chain Analysis (VCA) refers to the process whereby a firm determines the costs
associated with organizational activities from purchasing raw materials to manufacturing
products to marketing those products.
All firms should use value-chain analysis to develop a nurture a core competence and
develop this competence into a distinctive competence. A core competence is a value-chain
activity that a firm performs especially well. When a core competence evolves into a major
competitive advantage, it is called a distinctive competence.
Firms use benchmarking to determine whether its value chain activities are competitive
compared to rivals. This entails measuring the costs of value chain activities across an industry
to determine “best practices” among competing firms for the purpose of duplicating or
improving upon those best practices.

4. Construct an Internal Factor Evaluation Matrix for an organization of your choice. 


Assign corresponding weights and ratings accordingly.

University of Santo Tomas Hospital

Key Internal Factors Weight Rating Weighted Score

Strength

Strong Brand name, image & 0.15 4 0.6


reputation

Accepts HMOs 0.03 2 0.06

Specialized physicians 0.1 4 0.4

Good benefits for regular employees 0.03 3 0.09


Delivers of affordable, reliable and
0.1 3 0.3
holistic healthcare services to all
Research and Development 0.1 3 0.3

Medical education & training 0.15 4 0.6

Strong performance in the healthcare 0.09 3 0.27


industry

Weakness

Flood prone area 0.04 1 0.04

Training Hospital (trainees are part of 0.04 2 0.08


medical staff)

Organizational Staff 0.04 2 0.08

A lot of competition in the area 0.04 2 0.08

Non-profit organization 0.09 2 0.18

Total 1.00 3.16

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