Create an IFE matrix of Tesla Energy. Please only identify 10 strengths and 10 w
ID: 397149 • Letter: C
Question
Create an IFE matrix of Tesla Energy. Please only identify 10 strengths and 10 weakness from the Tesla Energy division, not space or motor division.
Below is an example posted by my professor.
Assignment 3.1: IFE Matrix
Microsoft Corporation: Internal Factor Evaluation Matrix
Key Internal Factors
Strengths
Weight
Rating
Weighted
Score
Strong distribution channels
0.07
4
0.28
Commercial cloud revenue up 114%
0.1
3
0.3
Flexible, contingent workforce
0.02
3
0.06
Skype acquisition (users have increased from 196 million to 300 million)
0.05
3
0.15
Increasing research and development investments (now 14% of total revenue)
0.08
4
0.32
Surface tablet revenue up 24%
0.03
3
0.09
Cash and cash equivalents of $63 billion
0.1
4
0.4
11 products that earn at least $1 billion per year
0.06
4
0.24
28% increase in Lumia devices sold
0.1
4
0.4
Weaknesses
Weight
Rating
Weighted
Score
Dependency on hardware manufacturers
0.06
1
0.06
Internet Explorer users continue to decline
0.06
1
0.06
Online Services Division consistently loses money (approx. $2 billion per year)
0.07
1
0.07
XBOX revenue down 20% year-over-year
0.03
2
0.06
Reputation has suffered due to Windows OS security flaws
0.04
2
0.08
Profits fell 10% in latest quarter
0.1
1
0.1
Significant integration and restructuring expenses
0.03
2
0.06
1
42
2.73
Microsoft Corporation is known for its success as the world’s largest software company; for decades, its operating system, Windows, has been the dominant software in personal computers (PCs), which was once the center of technology (New York Times, 2015). However, as consumer demand has shifted away from PCs and toward more portable, cloud-based technology, Microsoft has been forced to reinvent itself across multiple markets.
In recent years, Microsoft has been slow to innovate, and has struggled to recognize market trends before they arrive; leaving them in the difficult position of having to “play catch-up,” in order to meet changing consumer demands. A prime example of this is in cloud-computing, where Microsoft has struggled to establish itself. In the past two years, however, this trend has begun to change, with Microsoft’s commercial cloud revenue increasing by a stunning 114% this fiscal year, largely due to Office 365, Azure, and Dynamic CRM Online services (Kobialka, 2015).
One of Microsoft’s biggest strengths is their financial performance; the company has “more than $63 billion in cash and cash equivalents that can be used for acquisitions and substantial investments in R&D” (Strategic Management Insight, 2015). Indeed, Microsoft has participated in dozens of acquisitions in the past decade, including its 2011 purchase of Skype for $8.5 billion; since the deal took place, the number of Skype users has increased from 196 million to 300 million worldwide (The Guardian, 2013). In addition, Microsoft’s research and development investments have increased in recent years, now representing 14% of the company’s total revenue (Microsoft, 2014).
Although revenue has increased significantly for Microsoft’s Surface tablet and Lumia mobile phones (24% and 28%, respectively), Microsoft’s mobile market share is still very small, at a “measly” 3% (TechCrunch.com, 2015). This presents significant challenges for Microsoft moving forward, as PC sales continue to decline, and mobile devices such as smartphones and tablets continue to increase in popularity worldwide.
Microsoft’s Internet Explorer still dominates the world of web browsers with over 1 billion users worldwide, but the browser has lost a significant number of users in the past decade, and Microsoft’s Online Services Division continues to lose money (approximately $2 billion per year); largely due to the expenses of their Internet search engine, Bing.
Despite Microsoft’s revenue increasing by 8%, improving to $26.5 billion in the quarter ended December 31 of last year, “the company’s profits fell by 10.6% to 5.9 billion” (Fortune, 2015); part of this decrease in profits was due to “integration and restructuring” expenses related
Microsoft Corporation: Internal Factor Evaluation Matrix
Key Internal Factors
Strengths
Weight
Rating
Weighted
Score
Strong distribution channels
0.07
4
0.28
Commercial cloud revenue up 114%
0.1
3
0.3
Flexible, contingent workforce
0.02
3
0.06
Skype acquisition (users have increased from 196 million to 300 million)
0.05
3
0.15
Increasing research and development investments (now 14% of total revenue)
0.08
4
0.32
Surface tablet revenue up 24%
0.03
3
0.09
Cash and cash equivalents of $63 billion
0.1
4
0.4
11 products that earn at least $1 billion per year
0.06
4
0.24
28% increase in Lumia devices sold
0.1
4
0.4
Weaknesses
Weight
Rating
Weighted
Score
Dependency on hardware manufacturers
0.06
1
0.06
Internet Explorer users continue to decline
0.06
1
0.06
Online Services Division consistently loses money (approx. $2 billion per year)
0.07
1
0.07
XBOX revenue down 20% year-over-year
0.03
2
0.06
Reputation has suffered due to Windows OS security flaws
0.04
2
0.08
Profits fell 10% in latest quarter
0.1
1
0.1
Significant integration and restructuring expenses
0.03
2
0.06
1
42
2.73
Explanation / Answer
IFE matrix basically means Internal Factor Evaluation Matrix, which is a strategic management tool for evaluating major internal strengths and internal weaknesses in functional areas of an organization or any business for further rectification in the required areas. Internal factors are the outcome of detailed internal audit of an organization because every company have some weak and strong points, therefore the internal factors are divided mainly into two categories namely strengths and weakness. Strengths are the strong attributes of the company, which are capitalized to take advantage of the external opportunities available in the industry. The strengths could be tangible or intangible; such as brand image, financial position, income, human resource. Weaknesses are the risky areas which needs to be addressed on priority basis to minimize its impact. The competitors always put their best effort to identify and capitalize on the weaknesses of the rival companies. IFE Matrix is an analytical technique related to the SWOT analysis.
The evaluation process can be described step by step in the following manner, firstly, process the table of internal factors, then assign to each factor a weight in the range from 0.00 to 1.00 according to the importance of the strengths or weakness - the sum of weights must be equal to 1.00, then rate each factor in the following manner - 4 points - major S, 3 points - minor S, 2 points - minor W, 1 point - major W, then we multiply the weight and rating for each factor - the result is a weighted ratio and finally sum of the weighted ratios of individual factors - result is an overall weighted ratio. Resulting weighted ratio evaluates the internal position of the organization or strategic intent. The best possible score is 4, the worst is 1. Average values are around 2.5.
Tesla is known all over the world for their innovative, sustainaible and most importantly clean energy products. With the recent acquisition of few energy companies and start-ups, Tesla Energy offers a full suite of energy products that incorporates solar, storage, and grid services. As the world’s only fully integrated sustainable energy company, it is encouraging businesses and people to think electric car, solar panels and battery storage as an integrated whole. Demand for Tesla’s energy storage products is so high that it cannot keep up with production even as the company continually adds capacity of production.
IFE Matrix of Tesla Energy.
Key Internal Factors
Strengths
Weight
Rating
Weighted
Score
Sustainable development and least possible greenhouse gases emission by its products
0.2
4.0
0.8
Research and development investments
0.08
4.0
0.32
Highly innovative ideas
0.07
4.0
0.28
High revenue and sales
0.05
3.0
0.15
High market share price
0.04
3.0
0.12
Technological and physical infrastructure
0.1
3.0
0.3
Product selection
0.05
3.0
0.15
Committed employees
0.06
3.0
0.18
Product quality
0.06
3.0
0.18
Price competitiveness
0.1
3.0
0.3
Weakness
Weight
Rating
Weighted
Score
Low margin of production
0.07
1.0
0.07
Lack of good dealership network
0.06
1.0
0.06
Gap in range of products
0.06
2.0
0.12
1
37
2.53
Key Internal Factors
Strengths
Weight
Rating
Weighted
Score
Sustainable development and least possible greenhouse gases emission by its products
0.2
4.0
0.8
Research and development investments
0.08
4.0
0.32
Highly innovative ideas
0.07
4.0
0.28
High revenue and sales
0.05
3.0
0.15
High market share price
0.04
3.0
0.12
Technological and physical infrastructure
0.1
3.0
0.3
Product selection
0.05
3.0
0.15
Committed employees
0.06
3.0
0.18
Product quality
0.06
3.0
0.18
Price competitiveness
0.1
3.0
0.3
Weakness
Weight
Rating
Weighted
Score
Low margin of production
0.07
1.0
0.07
Lack of good dealership network
0.06
1.0
0.06
Gap in range of products
0.06
2.0
0.12
1
37
2.53
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