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 1st

Quadrant

3rd Quadrant 4th Quadrant

 Most important determinants of an organization’s
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 1st

Quadrant
External
Dimension

3rd Quadrant 4th Quadrant

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

Internal Dimension

2nd Quadrant 1st

Quadrant

3rd Quadrant 4th Quadrant External

Dimension
 FINANCIAL
STRENGTH

Conservative Aggressive

INDUSTRY STRENGTH
COMPETITVE
STRATEGY

Defensive Competitive

ENIVRONMENT STABILITY
 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 Variability Extent Leveraged

Working Capital Customer Loyalty Place range of Resource Utilization

competing products
Cash flow Capacity Utilization Barriers to entry into Ease of entry into
the market market
Inventory Turnover Technological Know- Competitive Productivity,
how Pressure capacity utilization
Earnings per share Control over Ease of Exit from
suppliers and market
distributors
Example Strategy Profiles
 Example Strategy Profiles

Copyright ©2013 Pearson Education, Inc. publishing

6-10 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
governmental
• Social,
Cultural and
demographic
• Technological
• Competitive
Key Internal
Factors
• Management
• Marketing
• Finance
• HR
• R&D
 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