1. External Factor Evaluation (EFE) –
Note table in your text.
Notice that there are three categories (Weight, Rating, and Weighted Score) and four categories if you count the Opportunities and Threats.

2. External Factor Evaluation (EFE) Weights
The Weight category represents the importance of that factor to being successful in the industry. The weight ranges from 0.00 (not-important) to 1.0 (very important)
Please note that when distributing weights, all the weights combined MUST not exceed 1.00

3. External Factor Evaluation (EFE) – Rating
The Rating category represents the firm’s current strategy response (rated from 1 – 4).
1 meaning the firm’s current strategy is poor in responding to this opportunity or threat.
2 meaning the firm’s current strategy is average in responding to this opportunity or threat.

4. External Factor Evaluation (EFE) Rating cont’d
3 meaning the firm’s current strategy is above average in responding to this opportunity or threat.
4 meaning the firm’s current strategy is superior in responding to this opportunity or threat.

5. External Factor Evaluation (EFE) – Weighted Score
The Weighted Score is simply multiplying the Weight by the Rating.
The provides a number that is the part of a much larger total that is yet to come.

6. External Factor Evaluation (EFE)
Now, here is a re-cap, plus a little more in-depth knowledge of the procedure.

7. External Factor Evaluation (EFE) – Step One
Five easy steps in creating an EFE
Step One – List all Opportunities in one section, and list all the Threats in another section as exhibited in the Table in your text.
Opportunities go first, followed by the Threats

8. External Factor Evaluation (EFE) Step Two
Step Two – You want to issue a weight to each of the opportunities and threats that were identified. The weight indicates how important that opportunity is contributing to the success of the organization in the industry.
Opportunities normally receive higher weights than threats, but threats can be high if that particular threat is really severe or threatening.

9. External Factor Evaluation (EFE) Step Three
Step Three – As mentioned earlier, Assign a rating to each of the Opportunities and Threats based on how the organization’s current strategy is responding to this opportunity or threat. For example, in just using the extremes for this example; 1, the organization is responding poorly and 4, the organization’s current strategy is responding in a superior fashion to this particular Opportunity or Threat

10. External Factor Evaluation (EFE) Step Four and Five
Step Four – Weight X Rating = Weighted Score
Step Five – Sum the Totals in the Weighted Score category for a Total Weighted Score

11. External Factor Evaluation (EFE)
Keep in mind, the highest possible score is a 4.0, and if this is the case, the organization is doing a tremendously good job
If the score is 1.0, the organization has some “Major League” problems
An average score is 2.5