Walt Disney External Factor Evaluation (EFE) Matrix

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External Factor Evaluation (EFE) Matrix

Key External Factors Weight Rating Weighted Score
Opportunities
Increasing Population 0.07 3 0.21
Exposure to the outside world 0.05 2 0.12
Increased campaigns on god parenting 0.06 4 0.24
Good economy leading to stable business 0.05 2 0.10
Technological advancement 0.07 1 0.7
Changing taste among children 0.6 3 0.18
Increased campaign on outside children related activities 0.7 3 0.21
Marketing by Movies 0.6 4 0.24
Threats
New companies in china and Japan are springing up 0.05 4 0.20
Technological advancement has led to inactive children 0.7 2 0.14
Health concerns/Disasters 0.06 1 0.06
Competition in the United States 0.05 3 0.15
Government policies on risky activities for the public 0.6 4 0.24
Decreasing population among developing countries 0.06 3 0.18
High maintenance cost 0.06 2 0.12
Security threat due to terrorism 0.05 2 0.10
Total 1.00   3.07

 

Walt Disney’s External Factor Evaluation (EFE) Matrix consists of the threats and opportunities within its industry. The matrix helps to evaluate the social, cultural, economic, demographic, environmental, government, technological, political, competitive, and legal factors which can affect the company (Capps & Glissmeyer, 2012). The modern world has embarked on activities that can help children play outside. Technology has led to many children only playing indoors (Bornstein & Bradley, 2014). This is an opportunity for Walt Disney. Additionally, movies especially those produced by Walt Disney Pictures have made the company popular. This is a marketing scheme that the company can exploit. However, the trend in developed countries of decreasing population is a threat to the company in the long run (Watts, 2013).

By identifying these threats and opportunities, Walt Disney can assess how they can restructure its activities or respond to them. Each factor is assigned a weight according to its importance which all adds up to 1. Each of the factors is then rated according to how Walt Disney is responding to such a factor (4=superior response…1=poor response) the weight is then multiplied by the rating and the scores are totaled. The threats and opportunities of Walt Disney combine to give the company a weighted score of 3.07. Walt is over but close to the average weighted score of 2.5. This means that the company can avoid capitalizing on opportunities and ensure they avoid external threats.

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