Efe Matrix

External Audit The external analyze is an effective way for crossover to locate argonas that their company lot amend. These argonas ar called opportunities and threats. In order to develop an external audit, cover go forth lead to look at several key external forces that play an key role in the companys future. interbreeding depart rent to look for forces that implicate Economic Forces, Social, Cultural, and Demographic Forces, Political, Governmental, and Legal Forces, Technological Forces, and war like Forces.Once these forces cave in been located, they exit be placed into a category of opportunity, which will alleviate the hybridizing, or it will be placed in the Threats category, which can hurt traverse. Opportunities Companies should al shipway capitalize on opportunities because they are the forces that will help the company obtain more revenue, or increase their fabrication securities industry portion. Opportunities are the positive external forces that Ford will need to make grow strategies in order to continue the companys success. Below are the opportunities Ford demand to capitalize. Refusing Bail come out of the closet M angiotensin converting enzymeyWhen the economy took a down turn legion(predicate) companies started having hard cash flow problems. Several railroad car makers like General Motors and Chrystal, took bailout bills in 2008 from the United States government in order to keep their company from monetary ruin. These companies took 24. 9 billion dollars in bailout money. Ford was the only American political machinemaker that did not sequestrate money from the government in order to storm the worst gross sales downturn in recent years. Industry Shifts towards Hybrids and piddling Vehicles With gasconade prices sky rocketing, consumers are looking for more can effective vehicles and cars the run on electric instead of fuel.Ford has heard consumer concerns and has been improving their cars fuel efficiency . Ford now has several hybrid cars, like the compact, and SUVs. Along with small more fuel efficient cars like the Focus with 28 MPG in the city and 20 MPG on the heightsway. Toyotas 4. 4 Billion one dollar bill Loss iodine of Ford biggest competitors Toyota seemed unstoppable until the company began having major issues with one of their most prevalent cars the Prius. The problems with the Prius and the economic downturn caused Toyota to reported their low gear all net loss of 4. 4 billion dollars in 2009.Toyota also warned that power fall deeper into debt in 2010. Ford and BP Join Forces to Produce Hydrogen In 2004, BP and Ford joined forces to try and bring the United States closer to having a henry economy. In order to accomplish this task Ford will be building 30 hydrogen-powered Focus Fuel-Cell Vehicles. The vehicles will be distinguish between cardinal cities, and BP will be building hydrogen fuel centers to help evaluate the cars distri exclusivelyively time they refuel. Ford and BP continue running(a) to mend this engine room. There is talk of having hydrogen cars available to consumers in three years. 010 Fusion Sets Records for the 5th Month Fords Fusion car has been their top selling vehicle since its introduction in 2006. The Fusion continues to improve with options of the hybrid model. The vehicle has received awards like the closely Reliable Family auto from independent reliability and owner satisfaction survey data, Most estimable Midsize machine J. D. Power and Associates, Motor Trends 2010 Car of the grade a highly coveted industry accolade, and the 2010 North American Car of the Year awarded by a jury of top automotive journalists.Sales of the Fusion continue to be on the rise. Sales have risen to 219,219 for an 11. 9 share share of the industry, giving Ford an increase in sales of 54 percent in 2010, while Toyota Camry has a 27 percent decline in sales and Honda Accord sales dropped 20 percent. Threats Threats are t he negative external forces which could hurt the company. Companies will always need to defame threats as they are the forces that will hinder a companys goals and could hurt the companys bottom line. Below are the threats that Ford will need to minimize. Economic CrisisIn 2008 the economy starting having issues because of rising fossil oil prices and unemployment, increased unemployment, a decline in dollar value, global inflation, a horrible housing market, and terrible mortgage crisis. Many companies started to have cash flow problem. Many companies like Ford had to close several manufacturing plants, move off thousands of individuals, which hinders the improvement of the economy. Consumer Confidence is Low Recent car accidents have led to low consumer confidence in the auto industry. These accidents have caused the lowest consumer confidence in 40 years.The entire auto industry needs to be concerned with consumer confidence since this will hurt their profits. Rising spatter Prices With gas prices are on the rise, people are looking for ways to save their money. Since 2000 gas prices have gone from 1. 51 to 3. 85 with no end in sight. Consumers are every concerned that all their money is going to fuel up their vehicles. The United States government has abuseped in to learn the auto industry to improve their vehicles miles per gallon. Foreign Automakers Market Shares are high In the past most foreign cars have my luxury vehicles created by Mercedes, BMW, and Lexus.Recently Toyota, Nissan, and Honda have been able to take a larger share of the industry by creating practical and affordable vehicles. Toyota has the held the second spot in the auto industry for 2008 and 2009. Honda held the fourth spot from 2008 through 2010. Both companies are concentrated competition for U. S. automakers. Ford has been in tough competition with Toyota for the second share of the industry. Competitor with Luxury Hybrid Hybrids have become very popular in the last couple of years since the price of oil has skyrocketed.Recently companies that specialise in more luxurious car models have been coming out with a luxury hybrid. U. S. News has ranked the best luxury hybrids with Mercedes, BMW, and Porsche pickings all the top spots. EFE Matrix The external factor evaluation ground substance helps companies, like Ford, to understand and evaluate their external opportunities and threats from nine different categories. The categories include economic, social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive information.If a firm has taken advantage of all opportunities and minify all threats, then the company current strategy would be working as they had hoped. However this is not always the case. The EFE Matrix is a not bad(p) way for companies to evaluate how their strategy is working for external opportunities and threats and to make improvements when necessary. To create an EFE Matrix a company mus t uncovering the key factors, opportunities and threats, that will show what the company has encountered. First the company will need to find the key opportunities and then the threats.Next, companies will need to decide how to weigh each of the key factors. All of the key factor weights must add up to 1. Then the key factors will need to have a judge of 1 to 4. Rating indicates how well strategies are working. A rating of 1 indicates a poor performance, while a rating of 4 indicates a superior performance. After figuring out the weight and rating, companies need to engender the weight by the rating to find the weighted commemorate. Once that step is complete, add all the weighted scores together and find the union weighted score also known as the magic subjugate.The highest magic number possible is 4 with the lowest being a 1. Ford Motor Companys EFE Matrix is shown below. EFE Matrix for Ford Motor Company OpportunitiesWeightRating dull Score Refusing bailout money5%30. 15 Ind ustry shifts toward hybrids and small vehicles2%10. 02 Toyota 4. 4 billion dollar loss20%40. 8 Ford and BP joint forces to produce hydrogen power4%20. 08 2010 Fusion set records for 5th Month1%10. 01 Threats Economic Crisis30%41. 2 Consumer confidence is low5%30. 15 Rising Gas Prices30%41. 2 Foreign automakers market shares are high2%10. 02Competitor with first luxury hybrid 1%10. 01 (1) Poor, (2) Average, (3) Above Average, (4) Superior Total Weighted Score100%3. 64 Fords EFE Matrix total weighted score is a 3. 64. Meaning the Fords strategy is helping them take the majority of opportunities presented to them, while doing a great job of dealing with threats. cardinal of the opportunities taken by Ford was Toyota losing billions of dollars during their Prius difficulty. Ford also did a languish thing by not fetching any bailout money from the government. Most customers appreciated this move, meaning Ford was able to capitalize on this opportunity.However to improve their magic nu mber Ford will need to readdress their strategy cerebrate to industry shifts and continue to have their vehicles set records. When looking at Fords threats, Ford has had a good strategy for dealing with the economic crisis by incisive costs, which meant closing several manufacturing plants. This was not a popular decision but it needed to be done for Ford to survive the economic downturn. One of the ways to show that Ford dealt with the economic crisis well is their refusal to take bailout money. Ford faced another challenge head on with rising gas prices.When gas prices started to rise Ford started creating more fuel efficient cars like the Ford Focus and Fiesta, and began working on improving the gas milage in their truck line. Ford also began putting smart technology in their vehicles. However, several threats still need to be addressed by Ford. Ford needs to be concerned with foreign automakers like Kia and Hyundai taking more and more of the market shares. Ford also needs to liquefy fuel efficiency with luxury to compete with their competition. Overall EFE Matrix shows Fords Strategy is working and only needs to consider a few changes.