Running head: MANAGEMENT 1

Space, Grand, and QSP Matrices Analysis

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Space, Grand, and QSP Matrices Analysis

Analysis of the significance of the three matrices regarding their relevance for strategic planning

Introduction

Strategic planning involves a process that entails formulation, implementation, and

review. The paper provides analysis of the significance of various matrices which include; space,

grand, and QSPM, based on their applicability in strategic planning. Key information concerning

the three matrices have also been described by the paper. Also, the paper describes how the

matrices will pose an influence on the recommendations to select, plan and implement various

strategies.

SPACE

SPACE is one of the various tools used for the formulation of the steps in strategic

planning. The tool has gained high reliability for taking into account macroeconomic,

microeconomic as well as financial factors in the determination of the organizational position. As

the SWOT analysis determines a firm's position through a review of its strengths, weaknesses,

threats, and opportunities, SPACE does so by formulating strategies through analysis of financial

strengths, industrial-strength, competitive advantage, and environmental stability. The tools are

very significant in the upper management of an organization as it is used in making strategic

choices and decisions and in plan creation (Ginter et al., 2018).

Each factor in the matrix has own particular measures. For instance, the financial strength

is measured by liquidity, return on investment, cash flows, related market risks, leverage, and the

possibility of an exit from the market. On the other hand, competitor advantage is measured by

product life cycle, market share, vertical integration, technological know-how, customer loyalty,
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and product quality. Industrial strength is measured by profit potential, technology, resource

utilization, and capital growth (Thomas, 2017). The tool also has four positions; aggressive,

conservative, defensive, and competitive positions through which the business is assessed before

recommending various strategies for the company. The identified position of the organization

thereafter determines the appropriate strategy for planning as well as the best choices for

strategic management (Genoveva & Siam, 2017).

Grand Matrix

A grand strategy matrix is a tool used in the formulation of alternative or feasible

strategies. Since it came up with alternative strategies, the tool has gained high popularity.

Through its two dimensions; market growth, which varies from slow to fast, and the competitive

position of the organization, which ranges from weak to very strong, four quadrants of the firm

are created. The organization can be placed in either of the quadrants for an easy selection of

suitable strategies. The tool also permits the formulation of the best strategy for different

divisions resulting from a business with split multiple divisions.

The appropriate strategies to be selected by an organization are sequentially listed in each

quadrant in order of attractiveness. The first quadrant consists of a powerful competitive position

as well as quick market growth resulting in pursuance of strategies like market development,

market penetration, product development, forward, horizontal and backward integration, and

related diversification. The organizations in this quadrant have an excellent strategic position as

it has a strong competitive base and fast-growing markets. By adopting such better strategies, the

organization will make its current competitive position stronger and possess readily existing

resources (Fazlollahtabar, 2018). The second quadrant consists of a weak competitive base with

rapid market growth. Organizations in such a position, which are associated with strategies such
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as the development of products, markets, and market penetration, should evaluate their current

market approach seriously. Since the quadrant is characterized by fast market growth, it should

consider undertaking an intensive strategy rather than integrative or diversification.

The third quadrant is characterized by a competitive position which is weak and slow-

moving market growth. Firms falling in this quadrant should take drastic measures for change to

keep off the risk related to further demise or possible liquidation. In this case, a strategy such as

extensive cost and retrenchment or asset reduction should be undertaken (David et al., 2015).

The fourth quadrant consists of a strong competitive position with slow market growth. The

firms here should go into related integration to develop a vast market for their commodities.

They can, however, pursue concentric or conglomerate diversification or joint ventures.

QSPM

QSPM is a strategic management model for evaluating possible strategies. The objective

of the model is to choose the best strategy using various management techniques. The process

involved in the model include identification of key strategic factors, formulate the type of

strategy likely to be pursued, and comparison of alternative strategies and determine the most

suitable one. The matrix includes the past stage details for computing the score of various

strategies purposely to obtain the best one for the company. One of its merits is that it does not

insist the planner or the strategist to key in the assumed information but rather extract the

information from the input stage and the matching stage. The matrix links the intuitive thinking

of business leaders with the analytical process in order to make the right decision concerning the

best strategy for the company.

Conclusion

In summary, the paper provides an insight into various tools used in the formulation of

strategic planning. The purpose of the paper is to analyze the significance of the three matrices

regarding their relevance for strategic planning. With an appropriate corporate strategy, SPACE

analysis is very significant in the creative of innovative ideas. Grand matrix is a tool used in the

formulation of alternative strategies. The QSPM, on the other hand, is purposely used in the

evaluation of the best strategies. All three models can be effectively used in strategy selection,

planning, and implementation.

Reference

David, F. R., & David, F. R. (2015). Strategic Management Concept and Cases: A Competitive

Advantage Approach. American Economic Review, 15.

Fazlollahtabar, H. (2018). Supply Chain Management Models: Forward, Reverse, Uncertain,

and Intelligent Foundations with Case Studies. CRC Press.

Genoveva, G., & Siam, S. T. (2017). Analysis of marketing strategy and competitive

advantage. Journal of Economic & Management Perspectives, 11(1), 1571-1579.

Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health care

organizations. John Wiley & Sons.

Thomas, B. (2017). Walt Disney: An American Original. Disney Electronic Content.

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