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total weighted score is 1.0. The average total weighted score is 2.5. A total weighted scoreof 4.0 indicates that an organization is responding in an outstanding way to existing opportunitiesand threats in its industry. In other words, the firm’s strategies effectively takeadvantage of existing opportunities and minimize the potential adverse effects of externalthreats. A total score of 1.0 indicates that the firm’s strategies are not capitalizing onopportunities or avoiding external threats.An example of an EFE Matrix is provided in Table 3-12 for a local ten-theatre cinemacomplex. Note that the most important factor to being successful in this business is “Trendtoward healthy eating eroding concession sales” as indicated by the 0.12 weight. Also notethat the local cinema is doing excellent in regard to handling two factors, “TDB Universityis expanding 6 percent annually” and “Trend toward healthy eating eroding concessionsales.” Perhaps the cinema is placing flyers on campus and also adding yogurt and healthydrinks to its concession menu. Note that you may have a 1, 2, 3, or 4 anywhere down theRating column. Note also that the factors are stated in quantitative terms to the extentpossible, rather than being stated in vague terms. Quantify the factors as much as possiblein constructing an EFE Matrix. Finally, note that the total weighted score of 2.58 is abovethe average (midpoint) of 2.5, so this cinema business is doing pretty well, taking advantageof the external opportunities and avoiding the threats facing the firm. There isdefinitely room for improvement, though, because the highest total weighted score wouldbe 4.0. As indicated by ratings of 1, this business needs to capitalize more on the “two newneighborhoods nearby” opportunity and the “movies rented from Time Warner” threat.Note also that there are many percentage-based factors among the group. Be quantitative tothe extent possible! Note also that the ratings range from 1 to 4 on both the opportunitiesand threats.The Competitive Profile Matrix (CPM)The Competitive Profile Matrix (CPM) identifies a firm’s major competitors and its particularstrengths and weaknesses in relation to a sample firm’s strategic position. The weightsand total weighted scores in both a CPM and an EFE have the same meaning. However,critical success factors in a CPM include both internal and external issues; therefore, theratings refer to strengths and weaknesses, where 4 = major strength, 3 = minor strength,2 = minor weakness, and 1 = major weakness. The critical success factors in a CPM are notgrouped into opportunities and threats as they are in an EFE. In a CPM, the ratings andtotal weighted scores for rival firms can be compared to the sample firm. This comparativeanalysis provides important internal strategic information.A sample Competitive Profile Matrix is provided in Table 3-13. In this example, thetwo most important factors to being successful in the industry are “advertising” and
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