The External Factor Evaluation (EFE Matrix
The External Factor Evaluation (EFE) Matrix
Key External Factors Weight Rating Weighted Score
Opportunities
1. U.S. sales of organic food and beverage have increased from $1 billion (1990) to $26.7 billion (2009). 0.08 3 0.24
2. Food manufacturers have experienced increase sales due to a higher number of people dining out. 0.10 4 0.40
3. Women are becoming more common in upper management (11.2% in 1995 to 16.4% in 2005). 0.06 4 0.24
4. Baked goods prices increased 10.7% compared to 2008. 0.03 1 0.03
5. Increased trends of flavor enhancer for bottled water. 0.13 4 0.52
6. Growing environmental consensus. 0.06 3 0.18
7. Increased demand for packaged and processed foods around the world due to change in lifestyles. 0.07 3 0.21
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Kraft had a superior response to this factor when they appointed Irene Rosenfeld in 2006. We weighted this factor a 0.06 because we felt that there is an increasing trend for women in upper management in many industries. One particular factor that we rated as a poor response by Kraft was the opportunities of baked goods prices increasing by 10.7% compared to 2008. However this is not a particularly crucial success factor resulting in a weight of only …show more content…
This factor was weighted a 0.07 because of the need to globalize and expand into European and other markets. In the world today you’re either growing or dying and the food processing industry is no exception, companies within the food processing industry know they must expand into new markets to retain market share and remain profitable. Another factor regarding competition in the food processing industry is the increased intensity of competition in North America. Kraft Foods is the number one food processor in North America which is why we regard this threat to be the most important to the success in the industry. ConAgra which is Kraft’s main competitor within the U.S. has recently sold off its beauty and health care divisions in order to focus primarily on food processing. Kraft has responded heavily to this threat with increased advertising in the U.S. to $50 million in 2009. The last external threat is also the least important to the success of the food processing industry. The declining value of the dollar and the increasing value of the euro has been an increasing threat over the past few years. We weighted this factor low at 0.02 because we feel the food processing industry has no control over inflation rates. We rated this factor a 2 because we feel that because Kraft operates in both the U.S.
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