SPACE MATRIX

SPACE Matrix is a Four-Quadrant framework which indicates

whether aggressive, conservative, defensive, or competitive
strategies are most appropriate for a given organization

2nd
Quadrant

3rd
Quadrant

1st
Quadrant

4th Quadrant

Most important determinants of an

organizations overall strategic position
Two Internal dimensions (financial position [FP] and competitive position
[CP])
Two External dimensions (stability position [SP] and industry position [IP])

Internal
Dimension
2nd
Quadrant

3rd
Quadrant

1st
Quadrant

4th Quadrant

External
Dimension

+ve Y-axis: Aggressive

-ve X-axis: Conservative
3rd Quadrant: Defensive
4th Quadrant: Competitive
Internal
Dimension
2nd
Quadrant

3rd
Quadrant

1st
Quadrant

4th Quadrant

External
Dimension

FINANCIAL
STRENGTH

Conservati
ve

Aggressive

INDUSTRY
STRENGTH

COMPETITVE
STRATEGY

Defensive
ENIVRONMENT

Competitiv
e

AGGRESSIVE QUADRANT
Excellent position to use internal strength:
1. Take advantage of external opportunities
2. Overcome Internal Weaknesses
3. Avoid or minimize external threats

CONSERVATIVE QUADRANT
Firm should stay close to its core competences and not
take risks

DEFENSIVE QUADRANT
Focus on rectifying internal weakness and
external threats

COMPETITIVE QUADRANT
Use Competitive strategies

Factors that makes up the SPACE Matrix

INTERNAL STRATEGIC POSITION

EXTERNAL STRATEGIC POSITION

FINANCIAL
POSITION

COMPETITIVE
POSITION

STABILITY
POSITION

INDUSTRY
STRENGTH

Return on
investment

Market Share

Technological
Changes

Profit Potential

Leverage

Product Quality

Rate of Inflation

Financial Stability

Liquidity

Product Life Cycle

Demand
Variability

Extent Leveraged

Working Capital

Customer Loyalty

Place range of
competing
products

Resource
Utilization

Cash flow

Capacity
Utilization

Barriers to entry
into the market

Ease of entry into

market

Inventory
Turnover

Technological
Know-how

Competitive
Pressure

Productivity,
capacity
utilization

Earnings per
share

Control over
suppliers and

Ease of Exit from

market

Example Strategy Profiles

Example Strategy Profiles

6-10

Copyright 2013 Pearson Education,

Inc. publishing as Prentice Hall

QUANTITATIVE STREGIC PLANNING

MATRIX:
Is a tool that allows strategists to evaluative alternatives
strategies objectively, based on key internal and external success
factors
KEY FACTORS
Key External
Factors:
Political,
legal and
government
al
Social,
Cultural and
demographi
c
Technologic
al
Competitive
Key Internal
Factors
Managemen
t
Marketing

WEIGHT

STRATEGY 1

STRATEGY 2

STRATEGY 3

CONTIGENCY STRATEGIES
A Back-up Plan
made on the basis of certain assumptions and
conditions
Formulated in advance to take care of unknown
events and unexpected challenges
Eg,. Labour strikes, a downturn in the economy or
an overnight change in government policy
Identify the scenario
Come out with alternative strategies
Identify the alternatives