Strategic
Management MGT603

**VU**

Lesson
25

**THE
STRATEGIC POSITION AND ACTION EVALUATION
(SPACE) MATRIX**

**Learning
objective**

After
understanding this chapter you are
able to understand SPACE
matrix and also understand
how to

prepare
the space matrix of any organization
and how it is helpful for
strategic formulation framework

**The
Strategic Position and Action Evaluation
(SPACE) Matrix**

The
Strategic Position and
Action Evaluation (SPACE) Matrix is
another important Stage 2 matching
tool

of
formulation framework. It explains that
what is our strategic position
and what possible action can
be

taken.
It is not closed matrix. It is
prepared on graph. It is closed
matrix. This follow counter clock
wise

direction.
It contains four-quadrant named
aggressive, conservative, defensive, or
competitive strategies.

The
axes of the SPACE Matrix
represent two internal
dimensions financial strength [FS]
and competitive

advantage
[CA]) and two external
dimensions (environmental stability [ES]
and industry strength
[IS]).

These
four factors are the most
important determinants of an
organization's overall strategic
position.

It
is divided into two internal
and external dimensions which are as
follow (Internal dimensions)
financial

strength,
competitive advantage, (External
dimensions) environment stability
and industry strength.
This

sequence
is convention to be followed as graphed
above. This frame work
determines appropriate set of

strategies
for each quadrant. First
quadrant is aggressive the firm fall in
this quadrant that fellow the

aggressive
strategy. Second quadrant is conservative
all those firms that fall n this quadrant
that must fallow

conservative
strategy and in next the
firm fellow the defensive
strategy. All the firms fall on
competitive

follow
that strategy. After a
rating is assigned ranging from +1
(worst) to +6 (best) to each of the
variables

that
make up the financial strength
and industry strength dimensions.
Assign a numerical value
ranging

from
-1 (best) to -6 (worst) to each of the
variables that make up the
environment stability and
Competitive

advantage
dimensions.

100