Use the IE Matrix to Analyze and Set Your Strategy

 

By Omodiaogbe Samuel

Overview

By the end of this guided project, you will be able to formulate your corporate strategy with the Internal-External (IE) Matrix. The IE Matrix is a portfolio management tool that is used to compare the various divisions of an organization in terms of revenue and percentage profit with respect to Internal Factor Evaluation (IFE) matrix and the External Factor Evaluation (EFE) matrix. The IE matrix belongs to the matching stage of strategy formulation, and it positions an organization into various divisions in a nine-cell display. The IE matrix is based on two key dimensions, the IFE matrix weighted score on the x-axis, and the EFE matrix weighted score on the y-axis. It’s required for each of the divisions to construct the IFE-EFE matrix, which helps in the eventual design of the corporate level IE matrix. Also, there are three main regions of the IE matrix and they inform the strategy to be pursued given the analysis conducted. And they are the grow & build region, hold & maintain region, and the harvest and divest region. The IE framework is a diagnostic and prescriptive tool for maximizing corporate competitiveness, and effective resources allocation.

To demonstrate the application of the IE matrix, we will use a spreadsheet to analyze an Energy Services Company that has five divisions. The example of the case study would empower you to use the model to analyze your company or any other company of your choice. The project is for business leaders who want to formulate their corporate strategy with the goal of implementing informed strategic decisions. Also, for strategist who are interested in helping organization in diagnosing, formulating, and executing the right strategies. At the end of the project, you will be able to use the IE Matrix to formulate your corporate strategy, and make effective resource allocation

 

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