IFE matrix: how to build it and read the total
Build an Internal Factor Evaluation (IFE) matrix: list strengths then weaknesses, weight them to 1.0, rate 1 to 4, and read the total against 2.50.
The Internal Factor Evaluation (IFE) matrix scores the internal strengths and weaknesses of a firm. List the key internal factors, strengths first and then weaknesses. Give each a weight from 0.0 to 1.0 so that the weights sum to 1.0, rate each from 1 to 4, multiply weight by rating, and add the results.
The total weighted score runs from 1.0 to 4.0, and 2.50 is the average. A total significantly above 2.50 means the firm is internally strong on these factors; well below 2.50, internally weak. The IFE belongs to the input stage of the strategy-formulation framework, alongside the EFE and the competitive profile matrix.
The IFE uses the same weight-times-rating arithmetic as the EFE. Try the sample EFE, no account needed.
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What the IFE matrix is for
The IFE matrix is an input-stage tool. It takes the findings of your internal audit (management, marketing, finance and accounting, production and operations, research and development, and information systems) and condenses them into one weighted, comparable number.
- It is fed by your internal audit: what the firm does well and badly, each traced to a source.
- Its strengths and weaknesses become the S and W of your TOWS matrix, and its factors reappear as key internal factors in the QSPM.
- Its total becomes the horizontal axis of the IE matrix.
Its external counterpart is the EFE matrix, which uses the same arithmetic on opportunities and threats.
What you need before you start
You need a list of internal factors that each trace to a source: financial statements, an operating record, a customer survey, an interview with a date. They come from the internal-audit chapter of your paper, not from memory. Each factor should be specific enough that someone could say whether it is true.
Decide the firm and the industry you are scoring before you open the grid. The weights describe the industry; the ratings describe your firm. Mixing the two is a common way to end up with a total you cannot defend.
Step 1: List the internal factors
The first step in developing an IFE matrix is to list the key internal factors from your internal audit, strengths first and then weaknesses. Editions of David differ on how many factors to list, so check the edition your program uses. State each factor as specifically as you can, with percentages or comparisons where you have them.
The sample below uses 6 factors (3 strengths and 3 weaknesses) to keep the example short. Use as many as your audit supports; the total always stays between 1.0 and 4.0 however many rows you have.
Step 2: Assign a weight to each factor
Give each factor a weight from 0.0 (not important) to 1.0 (very important), based on how much it can affect success in the industry. The weights must sum to 1.0, so a heavy weight on one factor takes weight from the others.
Sum of all weights = 1.0Example: 0.25 + 0.20 + 0.20 + 0.15 + 0.10 + 0.10 = 1.00
Weigh a factor by its importance to the industry, whether it is a strength or a weakness. The factors that most affect performance get the highest weights, so a weakness can outweigh a strength.
Step 3: Rate each factor from 1 to 4
Rate each factor from 1 to 4 for what it is. The scale has four whole-number steps, so use whole numbers only:
- 4: a major strength.
- 3: a minor strength.
- 2: a minor weakness.
- 1: a major weakness.
A strength is rated 3 or 4 and a weakness 1 or 2. Unlike the EFE, the rating describes the factor itself, not how the firm responds to it, so the rating also tells you whether the factor is a strength or a weakness.
“Why is this a major strength and not a minor one?”
Rate a 4 only where the evidence shows a clear advantage that matters in the industry, such as a measurable lead over rivals. Point to the audit page or figure that shows it. If the evidence only shows the firm is good, a 3 is the honest rating.
Step 4: Multiply, then add
Multiply each weight by its rating to get the factor's weighted score, then add the weighted scores for the total weighted score.
Weighted score = weight × ratingTotal weighted score = sum of all weighted scores
The total is always between 1.0 and 4.0. 2.50 is the average, and the total is only meaningful once the weights sum to 1.0.
Worked example: Tala Provisions (fictional)
Tala Provisions, Inc. is a fictional coffee roaster. Its strengths and weaknesses are the ones used in the TOWS guide, and its weights and ratings are made up for this guide.
| Factor | Type | Weight | Rating (1–4) | Weighted score |
|---|---|---|---|---|
| S1 Small-batch roasting in house, with roast dates on every bag | Strength | 0.25 | 4 | 1.00 |
| S2 Direct supply agreements with farm cooperatives | Strength | 0.20 | 4 | 0.80 |
| S3 Loyal base of café and office accounts | Strength | 0.20 | 3 | 0.60 |
| W1 Thin online marketing capacity | Weakness | 0.15 | 2 | 0.30 |
| W2 One roasting site for all orders | Weakness | 0.10 | 2 | 0.20 |
| W3 Limited cash for new equipment | Weakness | 0.10 | 2 | 0.20 |
| Total weighted score | 1.00 | 3.10 |
Take S1, small-batch roasting in house, with roast dates on every bag. Its weight is 0.25 and its rating is 4 (major strength).
Weighted score = weight × rating0.25 × 4 = 1.00
Adding the 6 weighted scores gives the total.
1.00 + 0.80 + 0.60 + 0.30 + 0.20 + 0.20 = 3.10
The IFE uses the same weight-times-rating arithmetic as the EFE. Try the sample EFE, no account needed.
How to read the result: what an IFE should total
An IFE total can be anywhere from 1.0 to 4.0, whatever the number of factors, and 2.50 is the average. Tala's total of 3.10 sits above it, so on these factors the firm is internally strong. The largest single contribution is S1 at 1.00: a heavy weight and a major strength.
A total is not a verdict on the firm, and it is not a forecast. It summarizes your own judgments, so another student with the same facts and different weights would get a different number. That is why each weight and rating needs a reason you can state. Its main use is as the horizontal axis of the IE matrix.
Where sources disagree: some course templates and slide decks use other rating scales or loose weights. If your adviser prescribes a different version, follow it. Strama uses David's: weights from 0.0 to 1.0 that sum to 1.0, ratings from 1 to 4, and a total from 1.0 to 4.0 with 2.50 as the average.
Common mistakes
The weights do not sum to 1.0.
The total can fall outside 1.0 to 4.0, and either way it cannot be compared with the 2.50 average.
Fix: add up your weight column before you read the total, and adjust until it is exactly 1.0.
Rating a strength 1 or 2, or a weakness 3 or 4.
The rating says whether the factor is a strength or a weakness, so a mismatch makes the row contradict its own label.
Fix: rate strengths 3 or 4 and weaknesses 1 or 2. If a factor does not fit, it is probably filed in the wrong list.
Weighting by how the firm is doing.
A weight shows how much the factor matters to success in the industry. Giving strengths the big weights because they are good news inflates the total.
Fix: rank the factors by their effect on industry success first, then split the 1.0 along that ranking.
Putting external factors in the IFE.
A tariff or a rival's price cut comes from outside the firm, so it belongs in the EFE matrix.
Fix: keep only what comes from inside the firm: its management, marketing, finance, operations, research and information systems.
Listing vague factors such as “good management”.
A panel cannot check it, and you cannot rate it against anything.
Fix: say what the firm does and how you know, with a figure or a comparison where you have one.
What your panel will ask
What is the first step in developing an IFE matrix?
List the key internal factors from your internal audit, strengths first and then weaknesses. Show the audit page each factor comes from, and be ready to say how many factors your edition of David suggests.
What should an IFE total, and what does 3.10 mean?
The weights sum to 1.0 and the total runs from 1.0 to 4.0, with 2.50 as the average. A total of 3.10 is above average, so the firm is internally strong. Add what drives it: the rows with the largest weighted scores, and the source behind each.
Which stage of the strategy-formulation framework includes the IFE matrix?
The input stage, together with the EFE matrix and the competitive profile matrix. The matching stage then uses its results, for example the IE matrix takes the IFE total as its horizontal axis.
Why did you weight this factor above that one?
Answer with the evidence that the first factor matters more to success in the industry, not with how well the firm does on it.
Where it goes next
The IFE feeds the matching stage. Its total weighted score is the horizontal axis of the IE matrix, and its strengths and weaknesses are the S and W you cross with opportunities and threats in the TOWS matrix.
Its twin is the EFE matrix, and the competitive profile matrix sets the firm against its rivals on the factors that decide the industry.
The IFE uses the same weight-times-rating arithmetic as the EFE. Try the sample EFE, no account needed.
Where this fits in your paper: the STRAMA paper format guide.
Sources
Method: Fred R. David's strategy-formulation framework, as set out in his Strategic Management: Concepts and Cases. Check the edition your program uses for page references.
Tala Provisions, Inc., its strengths and weaknesses, and its sources are fictional, made up for this guide.
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The IFE uses the same weight-times-rating arithmetic as the EFE. Try the sample EFE, no account needed.
Related guides
- EFE matrix
Build an External Factor Evaluation (EFE) matrix: weights that sum to 1.0, ratings from 1 to 4, and what the total weighted score tells you.
- IE matrix
Build an Internal-External (IE) matrix: plot your IFE total and EFE total on the nine-cell grid and read the grow, hold or harvest region.
- Competitive profile matrix
Build a competitive profile matrix (CPM): pick critical success factors, weight them to 1.0, rate each firm 1 to 4, and compare the totals.