EFE Matrix

The EFE matrix is the strategic tool used to evaluate firm existing strategies, EFE
matrix can be defined as the strategic tool to evaluate external environment or macro
environment of the firm include economic, social, technological, government, political,
legal and competitive information.
External Opportunities Weight Rating Weight Score
Growing Segment of Female Athletes & Demand 0.12 4 0.48
Increasing General Demand of Products for Leisure Activities 0.08 2 0.16
Additional Marketing of Existing Products 0.07 2 0.14
Consumer Use of Products Changes from Athletic Purpose to 0.10 2 0.20
Fashion Use
Technological (e-commerce marketing) 0.10 3 0.30

External Threats Weight Rating Weight Score

High Competitive Industry 0.13 4 0.52
Production of Counterfeit Goods 0.10 3 0.30
Negative Public Perception 0.09 3 0.27
Competitors copy Nikes Business Model 0.09 2 0.18
Global Economic Downturn 0.12 3 0.36

Total 1.0 2.91

By adding the weighted score opportunities and threats of Nike, the total
weighted score is 2.91. Highest possible total weighted score of a firm is 4.0 whereas
the lowest possible weighted score is 1.0. The total weighted score remains in the limit
of 1.0 to 4.0 regardless of the total number of opportunities and threats. Similarly, the
average total weighted score is 2.5. If the total weighted score of a company is 4, it
means that the company is effectively taking advantage of existing opportunities and is
also to minimize the risk. However, the total weighted score of 1 shows that the firm is
not able to take the advantage of current opportunities or to avoid external threats.
Total weighted score of Nike is 2.91 which is slightly above the average score.
Hence, this shows that Nike is effective as it is able to take advantages of existing
opportunities which are growing segment of female athletes and demand, switching of
consumer use and e-commerce marketing. Besides, EFE Matrix also shows that Nike is
able to minimize the potential adverse effects of external threats like high competition,
global economic downturn and production of counterfeit goods.