

Strategic
Management MGT603
VU
Lesson
30
GRAND
STRATEGY MATRIX
Learning
objective
Grand
strategy matrix is a last
matrix of matching strategy
formulation framework. It same as
important
as
BCG, IE and other matrices.
This chapter enables you to
understand the preparation of GS
matrix.
The
Quantitative Strategic Planning Matrix
(QSPM)
The
last stage of strategy
formulation is decision stage. In this
stage it is decided that
which way is most
appropriate
or which alternative strategy should be
select. This stage contains
QSPM that is only
tool
for
objective evaluation of alternative strategies. A
quantitative method used to collect
data and prepare
a
matrix for strategic
planning. It is based on identified
internal and external crucial
success factors.
That
is only technique designed to determine the relative
attractiveness of feasible alternative
action.
This
technique objectively indicates which
alternative strategies are best.
The QSPM uses input
from
Stage
1 analyses and matching
results from Stage 2
analyses to decide objectively
among alternative
strategies.
That is, the EFE Matrix,
IFE Matrix, and Competitive
Profile Matrix that make up
Stage 1,
coupled
with the TOWS Matrix, SPACE
Analysis, BCG Matrix, IE
Matrix, and Grand Strategy
Matrix
that
make up Stage 2, provide the
needed information for
setting up the QSPM (Stage
3).
Preparation
of matrix
Now
the question is that how to prepare
QSPM matrix. First it
contains key internal and
external
factors.
An internal factor contains
(strength and weakness) and
external factor include
(opportunities
and
threats). It relates to previously IFE
and EFE in which weight to
all factors. Weight
means
importance
to internal and external factor.
The sum of weight must be
equal to one. After
assigning the
weights
examine stage2 matrices and
identify alternatives strategies
that the organization should
consider
implementing. The top row of a
QSPM consists of alternative strategies
derived from the
TOWS
Matrix, SPACE Matrix, BCG
Matrix, IE Matrix, and Grand
Strategy Matrix. These
matching
tools
usually generate similar
feasible alternatives. However,
not every strategy suggested
by the
matching
techniques has to be evaluated in a QSPM.
Strategists should use good
intuitive judgment in
selecting
strategies to include in a QSPM. After
assigning the weight to strategy,
determine the
attractiveness
score of each and afterwards
total attractiveness score.
The highest total
attractiveness
score
strategy is most
feasible.
Steps
in preparation of QSPM
1.
List of the firm's key external
opportunities/threats and internal
strengths/weaknesses in the left
column
of the QSPM.
2.
Assign weights to each key
external and internal
factor
3.
Examine the Stage 2 (matching) matrices
and identify alternative strategies
that the organization
should
consider implementing
4.
Determine the Attractiveness Scores
(AS)
5.
Compute the Total Attractiveness
Scores
6.
Compute the Sum Total Attractiveness
Score
110
Strategic
Management MGT603
VU
Strategy
1 Strategy 2
Strategy
3
Weight
AS
TAS
AS
TAS
AS
TAS
Key
External Factors
Economy
conditions
Social/Cultural/Demographic
/Environmental
Political/Legal/Governmental
Competitive
Technological
Consumer
attitude
Key
Internal Factors
Research
and Development
Computer
Information
Finance/Accounting
Production/Operations
Management
Marketing
Systems
Limitations
1.
Requires intuitive judgments
and educated
assumptions
2.
Only as good as the prerequisite
inputs
3.
Only strategies within a given
set are evaluated relative to
each other
Advantages
1.
Sets of strategies considered
simultaneously or sequentially
2.
Integration of pertinent external and
internal factors in the decision making
process
111
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