Describe the EFAS and the IFAS. What is the purpose of each tool? Are there any weaknesses in the EFAS/IFAS classification system?
The EFAS stands for the external factors analysis summary. The EFAS table lists the Opportunities and Threats faced by a company, which has five columns. In the first column the opportunities and threats of the company are listed, in the second column the weight assigned to each factor is mentioned. The total weights of the external factors add up to 1.0. The third column has the rating given to each factor. The rating ranges from 5 outstanding to 1 poor. The rating indicates the company's response to that factor. The fourth column has the weighted score which is the rating multiplied by the weight. The fifth column is the comments column. When all the weighted scores are added a composite score ranging from 1 to 5 will be obtained. The composite score will indicate how well the firm is responding to the external factor (Hunger.D, & Wheelen.T, pp 51-52, 2007).
The IFAS stands for the internal factor analysis summary. In this the strengths and weaknesses are similarly listed and a composite score is obtained. It indicates the quality of the firm's response to the factors in its internal environment. (Hunger.D, & Wheelen.T, pp. 72-73, 2007)
What is the purpose of each tool? (20 points)
The purpose of each tool is to identify the external and internal factors that are of strategic significance to the company. Additionally, this tool indicates the significance of each factor to the companies through the weight assigned to each aspect. The relative importance of each aspect can also be ascertained from the weights. The rating gives the quality of response of the firm to each external and internal factor. The rating, the weighted score and the total score shows the responsiveness of the company to the internal and external factors. In short these factors show how well the company responds to these factors (Hunger. D, & Wheelen....
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