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IE Matrix Report

The internal-external matrix compares a company's internal strengths and weaknesses (IFE) against external opportunities and threats (EFE) to determine strategic options. Quadrants 1, 2 and 4 indicate high IFE and EFE, suggesting strategies like integration and intensive growth. Quadrants 3, 5 and 7 have moderate scores and call for holding market share through penetration, development and product improvement. Quadrants 6, 8 and 9 are low on both, necessitating defensive strategies like retrenchment, divestment and liquidation to harvest resources.

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Amitesh Puri
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1K views

IE Matrix Report

The internal-external matrix compares a company's internal strengths and weaknesses (IFE) against external opportunities and threats (EFE) to determine strategic options. Quadrants 1, 2 and 4 indicate high IFE and EFE, suggesting strategies like integration and intensive growth. Quadrants 3, 5 and 7 have moderate scores and call for holding market share through penetration, development and product improvement. Quadrants 6, 8 and 9 are low on both, necessitating defensive strategies like retrenchment, divestment and liquidation to harvest resources.

Uploaded by

Amitesh Puri
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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EXPLANATION OF INTERNAL-

EXTERNAL MATRIX

SUBMITTED TO: Prof. ANSHUL MATHUR

SUBMITTED BY: AMITESH PURI (PGFA1618)

Internal-External Matrix
Fig. Internal-External Matrix

1. Quadrant 1, 2 and 4: Grow and Build


i) The Company is high on EFE as well as the IFE, which means that the
company is able to grab the opportunities prevailing in the market as the
company is high on strengths. The company is also able to avoid threat
in the market well as it is high on EFE matrix.
ii) The company will be using Intensive and Integration strategies to grow
and build.
iii)Integration Strategy: Integration is done when the industry has growth
potential and as indicated in the I-E matrix, it shows that there is ample
opportunities in the market and the company has the required strength
to grab those opportunities. Moreover, it also has the strengths to avoid
the threats prevailing in the market.
The company is looking to increase the profits through various ways and
forward and backward integration can be the solution. When the present
distributors or suppliers have high profit margins, it suggests that making
investments in the process in worthwhile as it helps in reducing the cost
for the company which, in turn, increases the profitability.
iv)Intensive Strategy: Market penetration, market development and
product development is referred to as intensive strategy, because they
require intensive efforts if a firms competitive position with existing
products is to improve. This strategy is used when the company is having
unused capacity of production and the company can get advantage from
economies of scale which will provide major competitive. As we can see
in IE matrix, there is opportunities lying in market and company has
moderate level strengths to grab them. So, we can use intensive
strategies to Grow and Build.
2. Quadrant 3, 5 and 7: Hold and Maintain
i) The company is at moderate level on both EFE and IFE matrix which means
that opportunities lying in the market is grabbed by the company
relatively well, but still there is a need to improve on their strengths so
that they can grow and build. The company will be using market
development, market penetration and product development strategies to
hold and maintain their market share.
ii) The company will be using market penetration, market development and
product development strategies to hold and maintain their market share.
The reason for this are that the current market are not saturated and
when we align it with strengths, it only allows the company to hold and
maintain their market share. It is also used when the market share of
major competitors have been declining and total industry sales have
been increasing. The company can produce more if it is having excess
production capacity and will result in economies of scale.
3. Quadrant 6, 8 and 9: Harvest and Divestment
i) The company is low on EFE and IFE which means that the company is low on
strengths and high on weakness, so they are not able to grab the
opportunities lying in the market and avoid threats.
ii) In this scenario, the company will be looking to get rid of the loss making
businesses and free their capital for further investments. So, the
company will be planning by using defensive strategy which constitutes
retrenchment, divestiture and liquidation. When the companys strengths
are low and weaknesses are high, means that the company is lacking in
resources. The company needs to free up their resources which has been
freezed.
iii) Various defense strategies which can be used are retrenchment,
divestiture and liquidation.

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