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Internal factors are the outcome of the detailed internal audit by a firm. Every
company has some weaknesses and strong points; therefore the internal factors are
divided into two categories namely strengths and weaknesses. Weight attribute in IFE
matrix indicates the relative importance of factor to being successful in the firms
industry. Ratings, which is a major weakness, is represented by 1.0; minor weakness is
represented by 2.0; minor strength represented by 3.0; major strength represented by
4.0. Weights and ratings are assigned subjectively. The sum of all weighted score is
equal to the total weighted score; the final value of the total weighted score should be
between 1.0 (low) to 4.0 (high). The average weighted score for IFE matrix is 2.5. Any
company that has a total weighted score below 2.5 is considered as weak. The
company that has a total weighted score higher than 2.5 is considered as strong in
position.
Weighted
Strengths Weight Rating
Score
1 Strong brand name, image, and reputation 0.15 4.00 0.60
2 Large market share 0.12 4.00 0.48
3 Strong financial performance and position 0.13 4.00 0.52
4 Strong management team 0.15 4.00 0.60
5 Strong global company 0.10 4.00 0.40
Weaknesses
1 High employee turnover rate 0.05 2.00 0.10
2 Poor product differentiation 0.05 2.00 0.10
3 No healthy menu 0.09 1.00 0.09
4 Unhealthy food image- Negative publicity 0.09 1.00 0.09
5 Decrease in profit 0.07 1.00 0.07
Strengths
Strengths are the strongest areas or attribute of the company, which are used to
overcome weaknesses and to take advantage of the external opportunities available in
the industry. The strengths could be tangible or intangible.
Weaknesses
Weaknesses are the risky areas that need to be addressed on priority to minimize its
impact. The competitors are always searching for the loopholes in the company and put
their best effort to capitalize on the identified weaknesses.
This is tied to the lowest weight because, even though McDonalds has the
same menu with its competitors, it is still the factor that gives McDonalds its
identity.
No healthy menu
With a rate of 1, McDonalds use trans-fat and beef oil in their food,
although it is not illegal, it affects badly on customers health because trans-fat is
causes of any kind of cancer. Consequently, a number of customers who care
about their health stop eating at McDonalds restaurants. There are chemicals
and ingredients that are found in McDonalds food which are not healthy. Our
bodies are not designed to digest and consume chemicals that cause harm.
Greasy, artificial foods are not the foods healthy people will be consuming. Thus,
It makes the revenue of company decreases.
This has the highest weight of all the weaknesses because, as a food
company, having a menu that is healthy for the customers is necessary.
Decrease in profit
With a rate of 1, McDonalds has to compete with many strong
brand names in the fast food industry such as Jollibee, Wendys, Burger
King, Mang Inasal and KFC. This fierce competition makes McDonalds lose a
large number of customers who prefer other brands. Such a decline is being
caused as a cumulative impact of other McDonalds weaknesses discussed
above.
This has a weight that is in between of the highest and the lowest because
the profit is one of the measures of how a company is doing.
Overall, McDonalds receives a total weighted score of 3.05, which indicates that
McDonalds has a strong internal position.