External Factor Evaluation and Internal Factor Evaluation for Oracle

Published: 2022-07-19 14:13:26
External Factor Evaluation and Internal Factor Evaluation for Oracle
Type of paper:  Course work
Categories: Management SWOT analysis
Pages: 5
Wordcount: 1152 words
10 min read
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In this paper, there is a critical review of management that Oracle Corporation adapted to improve its success. The evaluation involves the use of Internal and external factor evaluation which is capable of determining strengths and weaknesses that Oracle Corporation is experiencing (Wikipedia, 2014). At the end, it will reveal the available opportunities that the company can explore. The views raised in the paper clearly outline some key issues that the management of Oracle Corporation needs to address in the future.

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Company Background

Oracle Corporation is a multinational business organization dealing in the production and sale of computers. It is located in Redwood Shores in California. This company is mainly developing and market database software and others technology software such as cloud engineering systems. This company performs very well in terms of its production capacity and sales revenues to the extent that it was ranked second in 2014.

Analysis of Oracle Corporation

The evaluation of Oracle Corporation was done through the use of both internal and external factor evaluation which is capable of indicating its strengths, weaknesses, opportunities, and threats.

External Factor Evaluation (EFE) Matrix

EFE Matrix is a tool which is used in evaluating business strategies that the business organization uses currently. It mainly concerns with the opportunities and threats that the company is currently facing in its business environment (Zulkarnain & Putranto, 2018). These factors are associated with PESTLE analysis. It is very easy to create an EFE matrix because the first action requires the collection of external factors relating to opportunities and threats. The second course of action is to assign weights to every factor which has been identified and they should fall within 1 and 100 where 0 indicates that the factor is valueless. 1 means that the factor is very influential while 100 indicate that the weight is very critical (Zulkarnain & Putranto, 2018). It is essential to find the total of all the weights which should add up to 100. The rates are then also determined and they indicate responsiveness of the company in relation to the factors rating. It is usually carried out between 1 and 4 whereby 1 represents poor response, 2 below average, 3 above average and 4 prompt responses. After that the product of each factor weight and the ratings producing a weighted score. In order to establish the EFE sum up all the weighted score obtained.

Weights Rating Weighted Score
Threats
Recession 19% 4 0.76
Taxation 11% 2 0.22
Low production cost 16% 4 0.32
Change in prices of raw materials 6% 2 0.12
Technological change 4% 2 0.08
Opportunities
Expansion to the Global market 15% 2 0.30
Strategic position 8% 2 0.16
Widening of market base 10% 3 0.3
Developing a good relationship with other businesses 11% 3 0.33
Total weighted score 100% 2.59

Oracle Corporation has a weighted score of 2.59 which shows it can respond to external factors effectively. This is because the weighted score is more than 2.50 a result which shows high response rate.

Internal Factor Evaluation Matrix

The internal factors are used to evaluate the strengths and weaknesses that the Oracle corporation is facing. It is created using the same process followed when developing EFE matrix. Internal factors affecting the company is collected then assign weights to each factor. Their products are determining to get a weighted score at the end.

Weights Rating Weighted Score
Strengths
High competition 14% 4 0.56
Large market area 12% 2 0.24
Good reputation 13% 4 0.56
Efficient management team 10% 2 0.20
Larger market share 9% 2 0.18
Weaknesses
Low quality of customer service 12% 2 0.24
Slow growth rate 13% 2 0.26
Expensive products 6% 3 0.18
Low product demand 11% 3 0.33
Total weighted score 100% 2.75

At the same time, the weighted score of Oracle Corporation is higher than 2.50 indicating that the company has a mutual response to such internal factors.

Three-Year Strategic Plan

Strengths - opportunities strategies

Oracle Corporation has a good reputation and very competitive. It is, therefore, further important to produce its products at a lower cost in order to attract and retain the existing customers. Because Oracle company also produces different products, it is important to improve their qualities and open different market outlets in various countries to increase their demand and penetrate new markets.

Strengths - Threat strategies

It is necessary for Oracle Corporation to retain its existing workers and ensure that it manages its workers well (David, 2009). The management of Oracle company should also encourage the workers to engage with one another to foster the smooth running of the organization in future. It is necessary for Oracle to way execute task variation and communicate with other workers to eliminate unnecessary conflicts and division. Furthermore, it can shift some of its workers to international offices in order to acquire new proficiencies and skills to make them loyal to the company.

Weaknesses-Opportunities

It is necessary for Oracle corporation to use a cost leadership strategy to offer its products for sale at a low price (Capps & Glissmeyer, 2012). This will also attract customers and make it more competitive. Low prices will increase the demand for its products when it sells its product at a low price. It can also increase the quality of its product to meet the market demand.

Pros and Cons and Application of each of the Analytical tools.

The applications of IFE and EFE matrix have several benefits that make them appropriate for use when evaluating different organizations. They are easy to understand because every input has a clear meaning as they cannot confuse any individual. Furthermore, they are easy to apply. The matrices applied when it is being used does not require expert knowledge. It can, therefore, be used and applied by any person (David, 2009). Finally, they are focused on both internal and external factors and this makes them different from other analyses such as value chain. On the contrary, these tools also have some limitations. Their matrices can be changed easily through the use of either SWOT and PEST analysis. They are also not important in strategic formulation but only help the organization understand the business environment it is operating in.

References

David, F.R. (2009). Strategic Management: Concepts and Cases. 12th ed. FT Prentice Hall

Wikipedia (2014). IFE matrix. Available at: http://en.wikipedia.org/wiki/IFE_matrix

Capps, J., & Glissmeyer, M. D. (2012). Extending The Competitive Profile Matrix Using Internal Factor Evaluation and External Factor Evaluation Matrix Concepts. Journal of Applied Business Research (JABR), 28(5), 1059. doi:10.19030/jabr.v28i5.7245

Zulkarnain, A., & Putranto, T. S. (2018). Analysis of IFE, EFE and QSPM matrix on business development strategy. IOP Conference Series: Earth and Environmental Science, 126, 012062. doi:10.1088/1755-1315/126/1/012062

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External Factor Evaluation and Internal Factor Evaluation for Oracle. (2022, Jul 19). Retrieved from https://speedypaper.com/essays/external-factor-evaluation-and-internal-factor-evaluation-for-oracle

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