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The Internal-External (IE) Matrix positions an organization's various divisions in a nine cell display illustrated in Figure 6-9. The IE Matrix is similar to the BCG Matrix in that both tools involve plotting organization divisions in a schematic diagram; this is why

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FIGURE 6-9

The Internal-External (IE) Matrix

THE IFE TOTAL WEIGHTED SCORES StrongAverageWeak

3.0 to 4.02.0 to 2.991.0 to 1.99 Grow and build4.03.02.0t n

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THE

EFE

Medium

TOTAL 2.0 to 2.99

WEIGHTED

SCORES

Low

1.0 to 1.99

High

3.0-4.-0

Hold and maintainHarvest or divest

Note: The IE Matrix was developed from the General Electric (GE) Business Screen Matrix. For a description of the GE Matrix, see Michael Allen, "Diagramming GE's Planning for What's WATT" in Corporate Planning: Techniques and Applications, eds. R. Allio and M. Pennington (New York: AMACOM, 1979)

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they are both called portfolio matrices. Also, the size of each circle represents the percentage sales contribution of each division, and pie slices reveal the percentage profit contribution of each division in both the BCG and IE Matrix. But there are some important differences between the BCG Matrix and IE Matrix. First, the axes are different. Also, the IF Matrix requires more information about the divisions than the BCG Matrix. Further, the strategic implications of each matrix are different. For these reasons, strategists in multidivisional firms often develop both the BCG Matrix and the IE Matrix in formulating alternative strategies. A common practice is to develop a BCG Matrix and an IE Matrix for the present and then develop projected...

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