Case Study of Nike, Inc.

The EFE assesses the effectiveness of a firm's responses to conditions and events in its external environment. Such events and conditions are largely beyond the control of a firm; therefore, a firm seeks to minimize threats in the external environment while maximizing opportunities through its responses. The spheres of a firm's external environment are as follows: (1) economic; (2) social; (3) cultural; (4) demographic; (5) environmental; (6) political; (7) legal; (8) technological; and (9) competitive. The opportunities and threats of SWOT (strengths-weaknesses-opportunities-threats) analysis are the key factors evaluated in an EFE. While the capability of a firm to respond to the external opportunities and threats is a function of a firm's internal strengths and weaknesses, the EFE does not measure strengths and weaknesses directly. Rather, the EFE measures the effectiveness of a firm's responses. Table 1 (below) presents the EFE for Nike.

TABLE 1 · EXTERNAL FACTORS EVALUATION: NIKE

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page) presents the IFE for Nike. TOWS Matrix Analysis The TOWS Matrix analysis cross-references (1) a firm's internal strengths and weaknesses with (2) its external opportunities within a matrix format. The TOWS Matrix model also provides a four-quadrant section for the identification of strategies that will permit a firm to deal effectively with the interactive impacts of internal and external factors. Table 3 (page 5) presents the TOWS Matrix analysis for Nike. Internal-External Matrix Analysis The I-E Matrix analysis develops a cross-evaluation of a firm's internal and external performance. The EFE and IFE assessments provide the basis for a firm's internal and external performance ratings. Performance ratings are (1) Excellent, (2) Average, or (3) weak. The intersection of firm's internal and external performance ratings indicates the appropriate type of strategy for a firm to follow. The three basis strategy types considered are as follows: (1) grow and build; (2) hold and maintain; (3) harvest and divest. Each strategy type includes a cluster of appropriate strategic actions for a firm to implement. (This discussion continues on page 6.) TABLE 2 · INTERNAL FACTORS EVALUATION: NIKE Key Internal Factors
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Approximate Word count = 1203
Approximate Pages = 5 (250 words per page)

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