The external factor evaluation matrix (EFE)

Key external factors Opportunities

1. Barriers to entry are high because of high capital requirements, and bankruptcy. 2. Enhance haul routes in underserved markets and large metropolitan areas. 3. Emergence of new technology (E-commerce) reducing operating cost. 4. Passengers are increasingly interested low price and comfort of the air craft. 5. Emergence of new federal laws enhancing security in airports.

Weight

Rating

Weighted score

Threats
1. Tough competitors like southwest airlines, delta airlines Inc. 2. Increase in fuel prices. 3. Level of obesity in the united states 4. After 9/11, terrorism is one of the biggest threats. 5. Imposition of taxes and fees from the government.

Total

The competitive profile matrix (cpm)

Critical JET BLUE SHOUTHWEST success factor Weight Rating Weighted Rating Weighted score score
Market share Price competitivenes s Advertisement Product quality customer service Total 0.2 0.15 2 3 0.4 0.45 4 4 0.8 0.6

DELTA AIRWAYS Rating Weighted score

0.6 0.45

3 3

0.15 0.25 0.25 1

4 4 3

0.6 1 0.75 3.2

3 3 4

0.45 0.75 1 3.6

3 2 2

0.45 0.5 0.5 2.5

Space matrix
Internal strategic position ratings Financial strength 3 Long term debts 4 ROA 2 Net Income 5 ROE FS avg: 3.5 Competitive advantage Market share Customer service Product development Tech. advancement CA avg: ratings -4 -5 -6 -5 -5 External strategic position Environmental stability Ratings Demand variability -2 Tax rates -3 Competitive pressure -4 Terrorism -2 ES avg: -2.75 Total y-axis score: 0.75 Industrial strength Financial stability Resource allocation Growth potential Profit potential IS avg: Total x-axis score: -0.75 ratings 2 5 4 6 4.25