Strategic Position and Action Evaluation (SPACE) Matrix has been materialized as a dominant instrument in formulating alternative strategies. Like Grand Strategy Matrix this matrix is also based on four important elements called four quadrants of SPACE Matrix. First two elements called internal dimensions which are Financial Strength (FS) and Competitive Advantage (CA) and other two are called external dimensions namely Environmental Stability (ES) and Industry Strength (IS). Undoubtedly these four rudiments are conceivably the most imperative determinants of an organization’s by and large strategic position. The four quadrants framework of SPACE Matrix represents the suitability or appropriateness of the strategies to be selected by a company such as aggressive, conservative, defensive, or competitive strategies. Organizations falling in four quadrants should adopt the strategies as follows:
Quadrant I Financial Stability and Industry Strength Aggressive
Quadrant II Financial Stability and Competitive Advantage Conservative
Quadrant III Competitive Advantage and Environmental Stability Defensive
Quadrant IV Industry Strength and Environmental Stability Competitive
1. A set of variables should be selected to define financial strength, competitive advantage, environmental stability, and industry strengths. The set of variables could be as follows:
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In step 2 of your practical example, you state to assign a value based on the "importance" of the factor. Should they not be ranked by how well the organization is performing in each factor??