External Factor Evaluation Matrix
The Internal Factor Evaluation Matrix (IFE) is constructed by using the obvious strengths and weaknesses in the internal organization of Wal-Mart Store. Key aspects of the strengths of the firms are its ability to obtain a growth rate in its sales during the fiscal year of 2007 by 11. 7%, its capacity to spend for advertising expenditures, its wide array of services, it pool of loyal employees, its number of stores, its ability to satisfy its customer base and its power of nurturing customer loyalty.
Vis-a-vis these strengths are the internal weaknesses of the company listed as its high dependency on its U. S. market, decline in comparable store sales growth and lastly low efficiency. Based on the result of this Internal Factor Evaluation Matrix (IFE) the internal aspect of Wal-mart Stores is good considering that the company basically got a good over-all grade of 3. 10. Its capacity to obtain a growth rate in sales of 11. 7% during the fiscal year of 2007 proves to be one of the main internal strength of the company, thus earning in this factor a score of . 60. Meanwhile its capacity for advertising expenditures gives the firm a score of .
On the factor of having a wide portfolio of services offered to the public, the giant retail store earned . 20. The retail store on the hand got . 10 score for employee loyalty. The company got an excellent mark of 4 for its strengths in the aspect of number of stores, customer satisfaction and ability to earn customer patronage. The behemoth retail store got a score for this segments . 60, . 40 and . 60 respectively. These scores are not at all a surprise since Wal-mart has always been privy on the accessibility of its stores to the public consumer.
Meanwhile, garnering the highest mark for customer satisfaction and ability to nurture customer loyalty is only a sign as to why the firm is the leading retailer company in the United States and the whole world. On the other hand, the list of weaknesses of the giant store got a palpable low grades. In terms of heavily depending on the American market, the company receives a score of . 30. It is obvious that the huge chunk of the market and sales and revenue of the store come from its home base market: the United States. This is dangerous as if putting all the eggs of the company in one basket.
Whatever happens to the retail industry of United States is the fate that tied the future of the retail store. Likewise, decline in the comparable store sales growth of the company proves to be a bane for the company. So on this aspect, the company gets a pity score of . 05. It is the same in terms of the efficiency of the store. Its low efficiency receives a mark of 1 thus earning it a score of . 10. Putting all side by side the strengths and weaknesses of the company, it still can be concluded that Wal-Mart Store is a successful store in terms of its ability to harness all its strengths to nullify the weaknesses it have.
It is therefore an expected result that the company leads the retail industry in the United States and around the world. The External Evaluation Factor Matrix is constructed using the existing opportunities and threats that are being experienced by the company. These opportunities are its strong market position in United States, having a world class supply chain, purchasing power increase, balance brand mix of products in its stores’ shelves, and lastly information technology. Meanwhile, its threats are the usual competition, taxation, counterfeit good and bad media exposure.
The results based on this External Evaluation Factor Matrix (EFE), Wal-Mart Store able to use to the maximum all the opportunities that external factors give to the company. It is very obvious that the hold of the store on the retail industry of United States is strong that it gets a high mark of 4 thus earning for itself a score of 2. 0. Other factors such as the powerful world class designed supply chain of the company, purchasing power increase, balance brand mix and information technology get a respectable scores of . 15, . 20, . 80 and . 15 respectively.