SPACE MATRIX

:
INTERNAL STRATEGIC POSITION EXTERNAL STRATEGIC POSITION

COMPETITIVE ADVANTAGE (CA)
Product life cycle Market share Product quality Customer loyalty AVERAGE TOTAL X-AXIS SCORE -4 -1 -2 -3 -2.5

INDUSTRY STRENGTH (IS)
Financial stability Growth potential Profit potential Productivity AVERAGE 2.5 5 5 5 5 5

FINANCIAL STRENGTH (FS)
Return on investment Liquidity Leverage Cash flow AVERAGE TOTAL Y-AXIS SCORE 5 5 4 6 5

ENVIORMENTAL STABILITY (ES)
Inflation rate Demand variability Price range of competing products Barriers to entry AVERAGE 2 -4 -4 -2 -2 -3

SPACE MATRIX:
1. Given the following information, develop a SPACE Matrix for the HP:

FS = +5; ES = -3; CA = -2.5; IS = +5.

The directional vector of the SPACE Matrix lies in the upper right quadrant, indicating that Aggressive -type strategies are most appropriate.

Financial Strength: 5 Competitive Advantage: -2.5 Environmental Stability: -3 Industry Strength: 5 Directional Vector Coordinates: X-axis:(-2.5) + 5 = 2.5; Y-axis: 5+ (-3) = 2

Conservative

2.5 2

Aggressive

Defensive

Competitive

So HP’s strategy selected my Space matrix is Aggressive which are these following: Aggressive:
1. Backward, Forward, Horizontal Integration 2. Market Penetration 3. Market Development 4. Product development 5. Diversification (Related or unrelated)

The Internal-External (IE) Matrix:

The IFE total Weighted Score
Strong 3.0 to 4.0 3 4 Average 2.0 to 2.99 (IFE) 2.68 2 Weak 1.0 to 1.99 1

I

II

III

3 (EFE) 2.87

IV

V

VI

The EFE Total Weighted Score
2

VII

VIII

IX

1

V = Hold and Maintain

The directional vector of HP’s IE Matrix lies in the V quadrant, indicating that Hold and Maintain-type strategies are most appropriate. So HP should adopt Following strategies.
1. Market Penetration 2. Product development

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