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 1st
Quadrant Quadrant

3rd 4th Quadrant

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 1st
Quadrant Quadrant
External
Dimension

3rd 4th Quadrant

Quadrant
 +ve Y-axis: Aggressive
-ve X-axis: Conservative
3rd Quadrant: Defensive
4th Quadrant: Competitive

Internal
Dimension

2nd 1st
Quadrant Quadrant

3rd 4th Quadrant External

Quadrant Dimension
 FINANCIAL
STRENGTH

Conservati Aggressive
ve

INDUSTRY
COMPETITVE STRENGTH
STRATEGY

Defensive Competitiv
e

ENIVRONMENT
 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 COMPETITIVE STABILITY INDUSTRY
POSITION POSITION POSITION STRENGTH
Return on Market Share Technological Profit Potential
investment Changes
Leverage Product Quality Rate of Inflation Financial Stability
Liquidity Product Life Cycle Demand Extent Leveraged
Variability
Working Capital Customer Loyalty Place range of Resource
competing Utilization
products
Cash flow Capacity Barriers to entry Ease of entry into
Utilization into the market market
Inventory Technological Competitive Productivity,
Turnover Know-how Pressure capacity
utilization
Earnings per Control over Ease of Exit from
share suppliers and market
Example Strategy Profiles
 Example Strategy Profiles

Copyright 2013 Pearson Education,

6-10 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 WEIGHT STRATEGY 1 STRATEGY 2 STRATEGY 3
Key External
Factors:
Political,
legal and
government
al
Social,
Cultural and
demographi
c
Technologic
al
Competitive

Key Internal
Factors
Managemen
t
Marketing
 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