SPACE (STRATEGIC POSITION & ACTION EVALUATION MATRIX)

Internal Strategic Position External Strategic position

Financial Strengths (FS) Environmental Stability (ES)
Return on Investment 5 Technological changes -3
leverage 3 Rate of Inflation -2
Working Capital 4 Price range of Competing products -3
Liquidity 5 Competitive pressure -5
Price earning ratio 4 Barriers to entry into market -4
    Demand variability -2
     
Total 21 Total -19
-
Average 4.2 Average 3.17
       
Competitive Advantage (CA) Industry Strength (IS)
Market Share -2 Growth Potential 5
Product Quality -3 Profit Potential 5
Customer Loyalty -2 Financial Stability 4
Technological know-how -2 Labor cost 3
Control over suppliers and
distributors -4 Technological know-how 4
     
Total -13 Total 21
Average -2.6 Average 4.2

FS Aggressive
Y-axis = FS + ES
Conservative
= 4.2+(-3.17)
=1.03

According to the space matrix score HP falls in the “AGGRESSIVE quadrant” . Their
strategies should be one of the following:

CA • Vertical and horizontal integration IS

• Market penetration

• Market development

• Product development
Defensive Competitive
• Diversification
ES