In 3 sentences:
The document summarizes the steps to develop an Internal Factor Evaluation (IFE) Matrix for Ford Motor Company. It lists 10 key internal strengths for Ford and assigns each a weight and rating to calculate the weighted score. This allows Ford to evaluate its major capabilities and competitive advantages such as large manufacturing expansion, improved vehicle quality reducing warranty costs, and strong sales of hybrid vehicles.
2. Your Company Name
Textbook:
According to Fred R. David, the strategic management process
consists of 3 stages, which is Strategy Formulation, Strategy
Implementation and Strategy Evaluation.
However, the process of identifying or determining internal
strengths and weaknesses factors of an organization is
included in the Strategy Formulation.
A summary step in conducting and internal strategic-
management audit is to construct an Internal Factor Evaluation
(IFE) Matrix. It allow strategies be conducted
2
INTRODUCTION
I
Fred R. David introduces the
IFE and EFE Matrix in his book
‘Strategic Management’.
3. Your Company Name
Purposes of IFE
Matrix
To summarizes and evaluates
the major strengths and
weaknesses in the functional of
business.
Provides a basis for identifying
and evaluating relationships
among those areas.
3
Cont..
• When developing an IFE Matrix, intuitive judgments are being
required. Intuitive judgment means a decision reached based
on subjective feeling.
• The authors also claims that a thorough understanding of the
factors included is more important than the actual number.
4. Your Company Name 4
5 STEP DEVELOP
IFE MARIX
01 List Key Internal Factors
02Assign The Weight
03 Assign Rating
04Multiple Each Factor
Weight
05 Sum The Weighted Score
4
START
END
5. Your Company Name 5
List 20 Key Internal Factors As Identified In
The Internal-audit Process.
• The 20 internal factors, includes the listing of 10 strengths & 10
weaknesses factors of an organization.
• The list of the factors should be specific as possible, it may using
percentages, ratios or comparative numbers
• In addition, the factors included should be ‘Action-able’ and divisional as
possible.
01
6. Your Company Name 6
Category:
Strengths
1. Production
2. Sales
3. Management
4. Marketing
5. Advertising
6. Service
7. CSR
8. Finance
9. Finance
Weaknesses
1. Finance
2. Operation
3. Service
4. Customer Service
5. Finance
6. Marketing
7. Service
8. Customer Service
8. Your Company Name 8
Assign A Weight That Ranges From
0.0 (Not Important) To 1.0 (All-important)
• The weight assigned to a given factor indicates the relative importance of
the factor to being the successful in the firm’s industry.
• The Factors considered to have greatest effect on the organization
performance should assigned the highest weight.
• Both strengths and weaknesses can received high weights. Moreover, the
summation of all weight must be equal to 1.0. The weight given is actually
an industry-based.
02
10. Your Company Name 10
Assign Rating Between 1 To 4 To Each Factor
• Assigning the rating to each factor to indicate whether that factor
represents:
- A major weakness (rating = 1)
- A minor weakness (rating = 2)
- A minor strength (rating = 3), or
- A major strength (rating = 4).
• Note that strengths must receive a 3 or 4 rating and weaknesses must
receive a 1 or 2 rating. Ratings are thus company-based.
03
12. Your Company Name 12
Multiply Each Factor’s Weight By Its Rating To
Determine A Weighted Score For Each Variable.
Weight X Rating = Weighted Score
04
14. Your Company Name 14
Sum The Weighted Score.
• Sum the weighted scores for each variable to determine the total weighted score for
the organization.
• Regardless of how many factors are included in an IFE Matrix, the total weighted score
can range from a low of 1.0 to a high of 4.0, with the average score being 2.5.
• Total weighted scores well below 2.5 characterize organizations that are weak
internally, whereas scores significantly above 2.5 indicate a strong internal position.
• The total weight score, determine:
05
1.0 2.0 2.5 3.0 4.0
(Low) Average (High)
Organization Weak Internally Organization Strong Internally
16. Your Company Name
Analysis
16
• This store receives a 2.5 total weighted score, which on a 1 to 4 scale is
exactly average/ halfway, indicating there is definitely room for
improvement in store operations, strategies, policies, and procedures.
• The IFE Matrix provides important information for strategy formulation.
• This retail computer store might want to hire another checkout person and
repair its carpet, paint, and bathroom problems.
• The store may want to increase advertising for its repair/services, because
that is a really important (weight 0.15) factor to being successful in this
business
19. Your Company Name 19
Key Internal Factors Weight Rating
Weighted
Score
Strengths 3 or 4
1
Largest manufacturing expansion in over 50 years by increasing capacity in six US
plants and by opening two new plants in Asia and one each in South America and
Europe.
0.07 4 0.28
2
Since 2005, Ford’s warranty repairs have declined 66% for vehicles in the first three
months of service with average warranty costs falling 54%.
0.08 4 0.32
3
The new F-150 comes with a 2.7-liter V6 Eco Boost engine, giving it the same power
as a V8, with much better fuel economy.
0.07 4 0.28
4
To improve safety, Ford now include Blind Spot Information Systems, lane alerts, and
rear parking assistance.
0.10 4 0.40
5
In 2014, Ford launched more vehicles than ever before. Ford proud of offering its new
Mustang for the first time ever in select markets in Europe and Asia.
0.04 3 0.12
6
In 2013, Ford sold over 85,000 hybrid or all electric, plug-in automobiles, up 150% from
2012 as the company attempts to produce ‘Tesla’ for the average person.
0.04 4 0.16
7
Ford derives approximately 60% of its revenues from the USA, Canada, and Mexico.
Virtually all the company’s profits in 2014 came from these countries.
0.05 4 0.20
8 Labor expenses were reduce after labor unions agreed to concessions. 0.01 3 0.03
9
The Ford Explorer has recently been shift to become more of a SUV style along with
several other popular SUV models.
0.07 4 0.28
10
The Ford Fiesta and Ford Fusion are excellent cars in the small- and mid-size
categories respectively.
0.04 3 0.12
Step 1: List Key Internal Factors01
20. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Strengths 3 or 4
1.
Largest manufacturing expansion in over 50 years by increasing
capacity in six US plants and by opening two new plants in Asia
and one each in South America and Europe.
0.07 4 0.28
20
Internet:
• Ford add close to 3,500 hourly jobs to meet customer
demand for the company’s best-selling vehicles.
• Ford add an additional 200,000 units of annual
straight-time capacity this year after increasing
annual straight-time capacity by 400,000 units in the
region last year.
• Ford shorten its summer shutdown from the
traditional two weeks to one week for a majority of
North American assembly plants, increasing
production by an extra 40,000 units
02 03
21. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Strengths 3 or 4
2.
Since 2005, Ford’s warranty repairs have declined 66% for
vehicles in the first three months of service with average warranty
costs falling 54%.
0.08 4 0.32
21
Internet:
• Ford Motor Company's steady vehicle quality improvement
in recent years is beginning to translate into significant
savings for the company and fewer repairs.
• Save cost for covering warranty claim from customer.
• Global warranty repairs have fallen 66% from 2005 to
2013. Over the same period, global warranty repair cost
per unit has improved by 54%, including improvements of
more than 70% in Asia Pacific Africa, more than 60% in
Europe and South America, and about 45% in North
America.
02 03
22. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Strengths 3 or 4
3.
The new F-150 comes with a 2.7-liter V6 Eco Boost engine, giving
it the same power as a V8, with much better fuel economy.
0.07 4 0.28
22
Internet:
• First Ford truck engine with automatic stop/start
capability. Specifically tuned for truck customers, this
technology shuts off the engine when the vehicle is at
a stop (except when towing or in four-wheel drive).
Once the brake is released the engine restarts
quickly.
• Base on the chart, Ford F-150 2.7L EcoBoost was on
top 3 where it consume 1 gallon of fuel for 23.8mile/
38.3km
• It shows that the engine can save oil consumption
and good for customer because they can save on
fuel.
02 03
23. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Strengths 3 or 4
4.
To improve safety, Ford now include Blind Spot Information
Systems, lane alerts, and rear parking assistance. 0.10 4 0.40
23
Internet:
• This is apparent in the approach they take to
ensuring the safety of their vehicles, and the
customer that drive and ride in them.
• Ford’s has always considered the safety of
their customers to be one their most important
jobs.
• Such features greatly help the driver to drive
safer and it is perfect for customers who are
not good at driving.
02 03
26. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Strengths 3 or 4
5.
In 2014, Ford launched more vehicles than ever before in a single
calendar year, including a new Mustang and F-150. Ford is
especially proud of offering its Mustang for the first time ever in
select markets in Europe and Asia.
0.04 3 0.12
26
Internet:
The all-new F-150 launched in the fall of
2014 is the first mass-market pickup truck
with an aluminum-alloy body, which
improves fuel economy. In addition, its
stronger steel frame contains more high-
strength steel, which enables the F-150 to
tow even heavier loads.
02 03
27. Your Company Name
More than 8,000 Mustangs sold
in Europe, customers show
preference for fastback body
style, 421 PS 5.0-litre V8 engine,
and Race Red and Magnetic Grey
colors
27
Aggressive new car launches these
past two years, including the launches
of the F-150, Mustang and Edge,
succeeded in setting new business
performance records for Ford in the
second quarter of 2015. Ford reported
its highest quarterly profit in 15
years, with a pre-tax profit of USD
2.9b and net income of USD 1.9b.
31. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Strengths 3 or 4
6.
In 2013, Ford sold over 85,000 hybrid or all electric, plug-in
automobiles, up 150% from 2012 as the company attempts to
produce what one executive called a Tesla for the average person.
0.04 4 0.16
31
Internet:
Calendar year 2013 hybrid market sales saw the Prius
“family” decline from 2012 totals. This was presumably
due to new competition, particularly from Ford.
The huge increase in sales means that Ford is now
second only to Toyota concerning hybrid vehicle sales in
the US. In addition, Ford’s share of the US hybrid market
is continuing to grow.
02 03
34. Your Company Name
Ford has attributed the Big Increase In Sales to the
strength of its new array of Electrified Vehicles :
34
2013 Ford C-Max Hybrid
$8,771
2019 Ford C-Max Hybrid
$10,071
35. Your Company Name 35
2013 Ford Fusion Hybrid 2019 Ford Fusion Hybrid
2013 Ford Lincoln MKZ Hybrid 2019 Ford Lincoln MKZ Hybrid
36. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Strengths 3 or 4
7.
Ford derives approximately 60% of its revenues from the USA,
Canada, and Mexico. Virtually all the company’s profits in 2014
came from these countries.
0.05 4 0.20
36
Internet:
Ford Motor Company was one of many
companies able to benefit by optimizing its
manufacturing operations without the distortion
of tariffs and other customs barriers.
The North American Free Trade Agreement
(NAFTA) entered into force on January 1, 1994,
eliminating most barriers to free trade between
the United States, Canada, and Mexico.
02 03
38. Your Company Name
The country
has a
relatively
skilled and
low-cost
labor force
38
There are several benefits to
Ford of manufacturing in Mexico:
Well located
geographicall
y to ship to
the U.S. or
South
America
Has wide-
ranging trade
agreements,
and has
government
policies
promoting
exports
Increasing
number of
Mexican
graduates from
engineering
and technical
schools, which
have expanded
the pool of
skilled labor
Allows for
duty-free
importation of
raw materials,
components
and equipment
needed in the
manufacture
of goods for
subsequent
export.
40. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Strengths 3 or 4
8.
Labor expenses was reduce after labor unions agreed to
concessions.
0.01 3 0.03
40
Textbook:
Wages, the second-largest expense, historically have
been about $70,000 per employee in the US and
account for 5% of total revenue expenses. Higher
commodity prices and wage expenses forced GM and
Chrysler to reach similar cost-cutting labor
agreements in concessionary deal with United Auto
Workers. Finally, Labor expenses were reduced after
labor unions agreed to concessions.
Internet:
The UAW agreement, which includes concessions,
intended to reduce operating costs and a change in
the way Ford funds a union-aligned healthcare trust,
aimed at making Ford competitive with the U.S.
operations of foreign carmakers.
02 03
41. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Strengths 3 or 4
9.
The Ford Explorer has recently been shift to become more of a
SUV style along with several other popular SUV models. 0.07 4 0.28
41
Internet:
The Explorer helped define the SUV segment and sales
in the U.S. peaked at 445,000 in 2000. Nearly 7 million
have sold since the SUV debuted in 1990. Ford will
rethink to make it more fuel-efficient and nimble to drive.
Explorer has been a popular and successful vehicle.
Ford Explorer has become one of the nation's most
popular police cruisers. It just crossed the 50% market
share threshold for the first time since it introduced in
2012.
02 03
43. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Strengths 3 or 4
10.
The Ford Fiesta and Ford Fusion are excellent cars in the small-
and mid-size categories respectively.
0.04 3 0.14
43
Textbook:
Subcompact Cars on Market Share
The smaller cars popular include the Ford Fiesta,
Chevrolet Sonic and Toyota Yaris which can start as
low as $15,000.
Midsize Cars on Market Share
Also extremely popular, taking much of the market
share away from larger vehicles. E.g. cars Ford Fusion,
Chevy Malibu, and Toyota Camry.
02 03
46. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Weakness 1 or 2
1 Ford reported EBT of negative $1.1 billion in both Europe and South America in 2014. 0.06 1 0.06
2
Ford is in the midst of a $400 million restructuring program in Europe and anticipates
Europe will become profitable sometime in 2015 or 2016.
0.02 2 0.04
3 Net income dropped by 56% in 2014. 0.02 1 0.02
4 In 2013, Ford only enjoyed a 5% Chinese market share. 0.04 2 0.08
5
Ford planned to invest $6 billion between 2013 and 2016 to shift automobile production
to the USA.
0.04 1 0.04
6
The US EPA has linked Ford to 42 toxic waste sites and the firm continues to be
criticized for producing gas guzzling large vehicles.
0.05 2 0.10
7
Ford recalled over 220,000 vehicles in January 2015 for faulty door handles and seat
belt fasteners.
0.09 1 0.09
8 In 2014, Ford’s revenue and net income decline dramatic. 0.05 1 0.05
9
Ford currently has $374 million in current pension liabilities and $9,721 million in non-
current pension liabilities.
0.03 2 0.08
10 Ford Cancels a $1.6 Billion Mexico Plant. 0.03 2 0.06
TOTAL 1 2.79
46
Step 1: List Key Internal Factors01
47. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Weakness
1.
Ford reported EBT of negative $1.1 billion in both Europe and
South America in 2014. 0.06 1 0.06
47
Internet:
• Pretax earnings is a company's income
after all operating expenses, including
interest and depreciation, have been
deducted from total sales or revenues, but
before income taxes have been
subtracted.
• Also known as pretax income or earnings
before tax (EBT).
02 03
48. Your Company Name 48
• Base on charts, full-year
pre-tax loss was $1.2b.
• This happened was caused
by unfavorable exchange,
higher costs (primarily
driven by higher inflation),
and lower volume, offset
partially by favorable net
pricing.
• The full year loss includes
$426 million of adverse
balance sheet exchange
effects, related primarily to
the devaluation of the
Venezuela bolivar in the first
quarter
49. Your Company Name 49
• Base on chart, Ford pre-tax
loss show improvement
where it decrease from $1.4
billion to $1.1 billion
• The improvement in pre-tax
results is more than
explained by higher volume
and lower cost, offset
partially by Russia and other
factors, including lower
component pricing and parts
and accessories profits.
50. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Weakness
2.
Ford is in the midst of a $400 million restructuring program in
Europe and anticipates Europe will become profitable sometime in
2015 or 2016.
0.02 2 0.04
50
Internet:
• Ford Business Restructuring - Europe
• The plan included the closure of two U.K. facilities
an assembly plant in Southampton, and a stamping
and tooling plant in Dagenham in 2013, and a major
assembly plant in Genk, Belgium by the end of
2014.
• Ford current estimate of total separation-related
costs for the U.K. and Genk facilities is
approximately $1 billion, excluding approximately
$200 million of pension-related costs.
• This restructuring program cost Ford a lot of
money.
02 03
51. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Weakness
3. Net income dropped by 56% in 2014. 0.02 1 0.02
51
Internet:
• Ford net income dropped from the previous year, primarily because
of higher costs, lower volumes and a series of surprising setbacks.
• Industry analysts said that Ford’s 2014 results were mostly because
Ford is investing heavily in revamping its product line-up, launching
23 vehicles in 2014 Ford Motor Co. posted a 56-percent drop in net
income in 2014 to $3.2 billion, bogged down by the cost of
introduction of 22 new vehicles globally as well as by a drop in its
share of the United States auto market.
• Heavy investment to expand Asian operations and restructure its
troubled European division at the same time it was grappling with
poor economic conditions in South America and Europe.
02 03
52. Your Company Name
Base on income statement, it
clearly show that net income
dropped from $7,182 billion in
2013 to $3,187 in 2014.
53. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Weakness
4. In 2013, Ford only enjoyed a 5% Chinese market share. 0.04 2 0.08
53
Internet:
Reason why ford market share in china still small :
• Compete with the $9,500 Chevrolet Sail
• Ford cars are expensive. In a market where 70 percent
of vehicles sold cost less than $14,500, Ford's
cheapest car is the Fiesta, which starts at $13,300.
• Ford's development costs are also steep compared
with competitors' because it still does much of the
research and design for Chinese vehicles at its
headquarters in Dearborn, Michigan, where costs are
relatively high.
02 03
54. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Weakness
5.
Ford planned to invest $6 billion between 2013 and 2016 to shift
automobile production to the USA.
0.04 1 0.04
54
Internet:
Automotive assembly compensation is
approximately 80% lower in Mexico then
in the United States and low wages.
02 03
56. Your Company Name
Low production costs and
low tariffs due to the broad
reach of Mexico’s Free Trade
Agreements (FTAs) made it
possible for the country to
emerge as a prime export
base.
56
Mexico:
Exports from Mexico to 44
countries are exempt from
tariffs, including the 10%
tariff the European Union
assign to imported motor
vehicles.
61. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Weakness
6.
The US EPA has linked Ford to 42 toxic waste sites and the firm
continues to be criticize for producing gas guzzling large vehicles.
0.05 2 0.10
61
Internet:
In 2006,
The Upper Ringwood’s residents sued Ford in a
New Jersey state Court for properly damage and
personal injuries, citing the improper disposal of
waste from the Mahwah plant.
Ford failed to tell more than 600 residents how
dangerous, the waste was and that Ford has yet
to properly clean it up.
02 03
64. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Weakness
7.
Ford recalled over 220,000 vehicles in January 2015 for faulty
door handles and seat belt fasteners.
0.09 1 0.09
64
Internet:
The Dearborn automaker is recalling 205,000
2010-13 Ford Taurus, Lincoln MKS and
Ford Police Interceptor sedans due to an
issue with the spring that controls the
interior door handles. Ford said the door
could become unlatched in a side-impact
crash, increasing the risk of injury.
02 03
65. Your Company Name 65
Ford Lincoln MKS
Ford Police Interceptor
Ford Taurus
66. Your Company Name
Ford is also recalling 16,100 2014 Ford Transit Connect Vans for a
potential issue with safety belt fasteners that may not have been
tightened properly.
66
67. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Weakness
8. In 2014, Ford’s revenue and net income decline dramatic. 0.06 1 0.06
67
Internet:
Ford’s net income fell to $52m, largely due to an $800m
charge from Venezuelan currency, controls and constraints
on what it can build and sell in the country.
In South America, Ford’s losses ballooned to $1.2bn as the
company ware hit by import restrictions in Argentina and a
weaker economy in Brazil.
Ford spent heavily to introduce a record 24 vehicles
worldwide, including a redesigned Mustang and the new
aluminum-body
F-150 pickup truck.
Ford struggled with higher warranty costs, including a $500m
charge for the recall of 850,000 vehicles with defective air
bags.
Ford cut its full-year pre-tax earnings forecast from $8bn to
$6bn. The company ended up hitting that lower target
earning $6.3bn in pre-tax profits
02 03
69. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Weakness
9
Ford currently has $374 million in current pension liabilities and
$9,721 million in non-current pension liabilities.
0.03 2 0.06
69
Internet:
The term pension liability refers to the
amount of money that a Ford’s has to
account for in order to make future pension
payments. Ford’s long-term strategy is to
reduce the risk of Ford’s funded defined
benefit pension plan.
The strategy reduces balance sheet, cash
flow, and income exposures and, in turn,
reduces our risk profile.
02 03
70. Your Company Name
Key Internal Factors Weight Rating
Weighted
Score
Weakness
10. Ford Cancels a $1.6 Billion Mexico Plant. 0.03 2 0.06
70
Internet:
Ford cancel plans unveiled to spend $1.6 billion to build the
new plant in San Luis Potosi, Mexico due to market demand
there is no volume & the demand that Ford’s expected for
that plant.
Ford has seen small cars markedly decline. After look at
Ford’s capacity and forecast for demand. It became very
clear that Ford’s did not need this plant.
Minister of Economy, Mexico claimed that it regrets Ford’s
decision and has ensured that the company will reimburse
San Luis Potosi state for any costs associated with the
investment
02 03
73. Your Company Name 73Step 5 : Sum the weighted score
05
Total Weighted Score = 2.79
74. Your Company Name
Analysis:
• Ford have strong internal organization.
• Overall, Ford Motor Company in 2015 receives a 2.79 total weighted score,
which on are 1 to 4 scale is exactly above average. This is indicates that a lot
improvement need to do by Ford’s.
• Based on weakness key internal by Ford the most problems occur in their
product is door handles and seat belt fasteners (weighted of 0.09).
• This IFE Matrix provide important information for strategy formulation such as
Ford might want to do intensive R&D on their product or want to find other
alternative to settle this problem.
78. Your Company Name 78
Key Internal Factors
Category
Strengths
1
Largest manufacturing expansion in over 50 years by increasing capacity in six US plants and by opening two new
plants in Asia and one each in South America and Europe.
Production & Operation
2
Since 2005, Ford’s warranty repairs have declined 66% for vehicles in the first three months of service with average
warranty costs falling 54%.
Warranties
3
The new F-150 comes with a 2.7-liter V6 Eco Boost engine, giving it the same power as a V8, with much better fuel
economy.
R&D
4 To improve safety, Ford now include Blind Spot Information Systems, lane alerts, and rear parking assistance. R&D
5
In 2014, Ford launched more vehicles than ever before. Ford proud of offering its new Mustang for the first time ever in
select markets in Europe and Asia.
Marketing & Production
6
In 2013, Ford sold over 85,000 hybrid or all electric, plug-in automobiles, up 150% from 2012 as the company
attempts to produce ‘Tesla’ for the average person.
R&D, Marketing &Production
7
Ford derives approximately 60% of its revenues from the USA, Canada, and Mexico. Virtually all the company’s profits
in 2014 came from these countries.
Finance
8 Labor expenses were reduce after labor unions agreed to concessions. Management & Finance
9
The Ford Explorer has recently been shift to become more of a SUV style along with several other popular SUV
models.
R&D & Marketing
10 The Ford Fiesta and Ford Fusion are excellent cars in the small- and mid-size categories respectively. Pricing & Production
Weakness
1 Ford reported EBT of negative $1.1 billion in both Europe and South America in 2014. Finance