Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 16/e

The Internal-External (IE) Matrix

The Internal-External (IE) Matrix positions an organization’s various divisions (segments) in a nine-cell display, illustrated in Figure 6-10. The IE Matrix is similar to the BCG Matrix in that both tools involve plotting a firm’s divisions in a schematic diagram; this is why they are both called portfolio matrices. Also, in both the BCG and IE Matrices, the size of each circle represents the percentage of sales contribution of each division, and pie slices reveal the percentage of profit contribution of each division. But there are four important differences between the BCG Matrix and the IE Matrix, as follows:

1. The x and y axes are different.

2. The IE Matrix requires more information about the divisions than does ...