The SPACE (Strategic Position and Action Evaluation ) analysis developed by Alan Rowe, Richard Mason, Karl Dickel, Richard Mann and Robert Mockler is a strategic tool that can be used for strategic planning or to evaluate whether a strategic plan is making sense or not.
This analysis assesses 2 internal environments (Financial Strength and Competitive Advantage) and 2 external environments (Industry Attractiveness and Environmental Stability) and map them into a SPACE Matrix diagram. Based on the analysis, the strategic position of the company can be seen bias towards conservative, aggressive, competitive or defensive.
Factors affecting Financial Strength include:
- Return on sales
- Return on investment
- Liquidity
- Debt ratio
- Available vs required capital
- Cash flow
- Inventory turnover
- Use of economies of scale and experience
- Market share
- Product range
- Product quality
- Product lifecycle
- Innovation cycle
- Customer loyalty
- Cost levels
- Vertical integration
- Speed of new product introduction
- Growth potential
- Profit potential
- Financial stability
- Technological know-how
- Resource utilization
- Complexity of entering the industry
- Labour productivity
- Capacity utilization
- Bargaining power of manufacturers
- Customer power
- Political uncertainty
- Technological change
- Inflation rate
- Interest rate
- Currency exchange rate
- Demand volatility
- Price range of competitive products
- Price elasticity of demand
- Pressure from the substitutes
- Cyclical issues
The score for each of the 4 environments is the average of all their underlying factors, which need to be plotted at their respective axis. Then, 4 lines are drawn joining all the dots.
The quadrant with the largest area of the drawn quadrilateral shows the favourable strategic position to be taken.
http://voyager8.blogspot.my/2017/08/space-analysis-with-strategic-position.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+blogspot/nzRYh+%28The+8th+Voyager%29
