Final Answer:
The EFE (External Factor Evaluation) ratings show how well a firm is doing on each factor.
The correct option is 1. How well a firm is doing on each factor.
Step-by-step explanation:
EFE Ratings Purpose: The primary purpose of EFE ratings is to assess how well a company is performing on various external factors.
Evaluation of Firm's Performance: EFE ratings analyze and evaluate a firm's effectiveness in responding to external opportunities and threats. The focus is on the firm's ability to capitalize on opportunities and mitigate threats.
Factor Assessment: EFE ratings do not specifically address opportunities or threats individually; instead, they provide an overall assessment of a firm's performance across all external factors.
Superior or Average Ratings: While the term "superior" or "average" is not explicitly mentioned in the context of EFE ratings, the assessment aims to gauge the effectiveness of a firm in the external environment.