Title: The SPACE Matrix | Swot Analysis | Strategic Management
Headings: The SPACE Matrix
The SPACE Matrix
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The SPACE matrix is a management tool used to analyze a company.
What is the SPACE matrix strategic management method?
This is what a completed SPACE matrix looks like:
Internal strategic dimensions:
Financial strength (FS)
External strategic dimensions:
Environmental stability (ES)
The following are a few model technical assumptions:
- The FS and ES dimensions of the model are plotted on the Y axis.
How do I construct a SPACE matrix?
Step 1: Choose a set of variables to be used to gauge the competitive
SPACE matrix example
SWOT analysis is a simple framework for generating strategic alternatives from a
The internal analysis is a comprehensive evaluation of the internal environment's
The SWOT analysis summarizes the external environmental factors as a list of
Multiple Perspectives Needed
SWOT Analysis Limitations
In consulting engagements with General Electric in the 1970's, McKinsey &
Business Unit Strength
The GE / McKinsey matrix is similar to the BCG growth-share matrix in that it
• The GE matrix generalizes the axes as "Industry Attractiveness" and
Industry attractiveness and business unit strength are calculated by first
The vertical axis of the GE / McKinsey matrix is industry attractiveness, which is
• Market growth rate
+ factor valueN x factor weightingN
Business Unit Strength
Plotting the Information
• Market size is represented by the size of the circle.
The following is an example of such a representation:
Resource allocation recommendations can be made to grow, hold, or harvest a
• Grow strong business units in attractive industries, average business units
BCG Matrix Model
A low-growth product is for example an established product known by the market.
Placing products in the BCG matrix results in 4 categories in a portfolio of a company:
BCG STARS (high growth, high market share)
- Stars are defined by having high market share in a growing market.
BCG QUESTION MARKS (high growth, low market share)
BCG CASH COWS (low growth, high market share)
- Cash cows are in a position of high market share in a mature market.
BCG DOGS (low growth, low market share)
And now, let's put all this into a picture:
Are there any problems with the BCG matrix model?
Some limitations of the BCG matrix model include:
Portfolio Management based on Market Share and Market
The four segments of the BCG Matrix
Placing products in the BCG matrix provides 4 categories in a portfolio of a company:
• Cash Cows (low growth, high market share)
the BCG Matrix and one size fits all strategies
Other uses and benefits of the BCG Matrix
Limitations of the BCG Matrix
Some limitations of the Boston Consulting Group Matrix include:
• It neglects the effects of synergy between business units.
BCG Matrix Forum
Grand Strategy Steps
• Step Two. Identify your Values, Beliefs, Attitudes and Capabilities.
• Step Three. Write your Mission Statement.
• Step Four. Perform an Environmental Scan.
• Step Five. Perform a SWOT Analysis.
• Step Six. Determine your Strategic Focus.
• Step Seven. Seek Performance Breakthroughs.
• Step Eight. Understand and Apply Cause and Effect Relationships.
• Step Nine. Develop a Strategy Map.
• Step Twelve. Execute, Adjust, Execute.
Grand Strategy: building your foundation
What business are you in and where are you now?
• Where are you going?
• Attitudes – emotional orientations exhibited by you and your business toward
• Capabilities – inherent knowledge and relationships that support getting work
• Why are you in business?
• What industry are you in (retail, wholesale, finance, manufacturing, durable or
• Who are your stakeholders (employees, suppliers, customers, investors and
 Emerging Products and Services
Strategic Focus breaks down into the following three disciplines:
• Operational Excellence – emphasizes efficient operations and costs controls to
• Crisis – the time you spend solving unanticipated problems
• Breakthrough – the deliberate time you spend on creative efforts to improve
• Customer Capital – the relationship, level of satisfaction, reputation, potential for
Financial Performance Goals – Increase Revenues and Profitability
increase customer satisfaction to cause increased revenues and profitability)
Customer Capital Goal - Increase Customer Satisfaction
 (What would it take to accomplish this Strategic Goal? Their
Performance Example: Increase Revenue and Profits
Customer (Place Goals here)
Capital Example: Reduce Customer Losses and Defections
by Increasing Customer Satisfaction
Structural (Place Goals here)
Human (Place Goals here)
Financial Perspective KPMs:
-Cash Flow - $xxx
Customer Capital KPMs:
Structural Capital KPMs:
-Ratio of Sales Persons to General and Administrative - x/y
-Time to Market for New Products – x months
-Inventory Turnover – 100% every x months
• -Mystery Shoppers Rating of Store Product Display and Appeal – Grade
Human Capital KPMs:
-Employee Turnover - x% per period
-Average Days missed per Employee – x%
-Employee Satisfaction - x% Highly Satisfied, Satisfied and so on
-Number of Suggestions Submitted - xx
-Number of Suggestions Adopted – xx
-Number of Employees Fully Qualified for Their Position – xx
So translate all of your Strategy Map goals into KPMs.
Grand Strategy Scorecard
Perspective/ Quarterly Data Source/
Goals KPM Target Actual Status* Owner
Profitability ROI 12% 13% (+) CFO
Satisfaction Sat Rating 95% 94% (-) Customer
Create and Maintain Grade A- A- (0) Mystery
* (+) = ahead of target / (0) = on target / (-) = behind target
The Quantitative Strategic Planning Matrix (QSPM)
Steps in preparation of QSPM
Key Internal Factors
Key External Factors
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Content: Factors should be evaluated across the organization
in areas such as: • Company culture
• Company image
• Organizational structure
• Key staff
• Access to natural resources
• Position on the experience curve
• Operational efficiency
• Operational capacity
• Brand awareness
• Market share
• Financial resources
• Exclusive contracts
• Patents and trade secrets
The SWOT analysis summarizes the internal factors of the firm as a list of strengths and
weaknesses. External Analysis
fAn opportunity is the chance to introduce a new product or service that can generate
superior returns. Opportunities can arise when changes occur in the external environment. Many of these changes can be perceived as threats to the market position of existing
products and may necessitate a change in product specifications or the development of
new products in order for the firm to remain competitive. Changes in the external
environment