Strategic Management (MGT603)

Assignment # 02

Company A Company B
Internal Strategic Position
Financial Strength (FS) +4.50 +1.30
Competitive Advantage (CA) -1.50 -5.50
External Strategic Position
Industry Strength (IS) +4.75 +1.50
Environmental Stability (ES) -3.00 -4.00

Requirements: (1+1+4+4)
Based on the above information, please answer the following questions.
1. Mention the location of each unit in the SPACE matrix.
2. Identify the most appropriate strategies for each unit and provide its proper justification.

Calculation for Company A:

First we add the two scores on the x-axis and two scores on the y-axis

Add X-axis values:

= IS + CA

= 4.75+ (-1.50)

=3.25

Add Y-axis values:

= FS +ES

= 4.50+ (-3.00)

=1.50

Now we plot the resultant point on X and point Y then Plot the intersection of the new x, y point.
 Company A SPACE matrix.
FS
Conservative Aggressive
+6
+5
+4
+3
+2
+1

CA IS
-6 -5 -4 -3 -2 -1 -1 +1 +2 +3 +4 +5 +6
-2
-3

-4
Defensive -5 Competitive
-6 ES

The graph indicates that firm adopts aggressive strategy.

Company A will place in aggressive quadrant and in aggressive quadrant there are some
strategies which can be followed by the company A

 Backward, forward, horizontal integration

 Market penetration
 Market development
 Product penetration
 Diversification

Company A need to improve its financial strength so it should follow market development and
Product penetration.
Calculation for Company B:

First we add the two scores on the x-axis and two scores on the y-axis

Add X-axis values:

= IS + CA

= 1.5 + (-5.50)

= -4

Add Y-axis values:

= FS +ES

= 1.30+ (-4.00)

= -2.7

Now we plot the resultant point on X and point Y then Plot the intersection of the new x, y point

Company B SPACE matrix.

FS
Conservative Aggressive
+6
+5
+4
+3
+2
+1
 IS
-6 -5 -4 -3 -2 -1 -1 +1 +2 +3 +4 +5 +6
-2
-3

-4
Defensive -5 Competitive
The graph indicates that firm adopts defensive strategy.
-6 ES
Company B will place in defensive quadrant and in defensive quadrant there are some strategies
which can be followed by the company B

 Retrenchment strategy
 Divestiture strategy
 liquidation strategy

Company B has worst position in environment stability and competitive advantage so company
B will follow divestiture strategy and retrenchment strategy.