Question

Internal Factor Evaluation (IFE) Matrix for Lazada Group.

Answer 1

IFE’s full form is internal factor evaluation.

IFE is a type of matrix which is used to study the strategy of a company. Or we can say it is a summary of an internal management audit. It précises the strengths and weaknesses of an organization.

We know about SWOT analysis which stands for Strengths, weaknesses, threats and opportunities.

A SWOT analysis consists of two types of factor matrix. These are:

Internal factor matrix and the external factor matrix.

Thus internal factor matrix is a subpart of SWOT analysis.

In SWOT analysis, the strengths and weaknesses are the internal factors to the organization and opportunities and threats are external to the organization.

So let us summarize the components of the IFE matrix:

A. Internal factors = All weaknesses and strengths

B. Weights = 0 to 1 (this means all the strengths and weaknesses will have a weight between 0 to 1 depending on management’s strategy and subjectivity. And the sum total of these weights must be 1

C. Rating = 1 to 4

Where,

1 = major weakness, 2 = minor weakness, 3 = minor strengths, 4 = major strengths.

D. Weighted Score

The structure of the IFE matrix is as follows

1. Making a table with four columns

2. Writing down all the strengths and weaknesses in the first column

3. Giving weights to each factor (strengths and weakness). The sum of the weights must be 1

4. Giving rating to factors (1 = major weakness, 2 = minor weakness, 3 = minor strengths, 4 = major strengths)

5. Calculating the total weighted score by multiplying the weights with ratings

A total weighted score of more than 2.5 is considered to be good.