Strategy Analysis and Selecting
Syed Saad Bin Kazim
SWOT Matrix
• SWOT matrix is a way to analyze competitive
position, both internal and external aspects of
doing your business.
• SWOT method is a key tool for company top
officials to formulate strategic plans.
• Each letter in SWOT matrix stands for:
• S: Strengths
Internal factors
• W: Weaknesses
• O: Opportunities External factors
• T: Threats
SWOT Matrix
SWOT Matrix
Internal Factors
Strengths Weaknesses
External factors S W
Opportunities
SO strategies WO strategies
O
Threats
ST strategies WT strategies
T
TWOS Matrix
SPACE Matrix
• The Strategic Position and ACtion Evaluation
matrix or short a SPACE Matrix is a strategic
management tool that focuses on strategy
formulation especially as related to the
competitive position of an organization.
• The SPACE matrix is based on 4 areas of
analysis:
– Financial Strength (FS) Internal strategic dimension
– Competitive Advantage (CA)
– Environmental Stability (ES) External strategic dimension
– Industry Strength (IS)
SPACE Matrix
• The SPACE matrix is broken down to four
quadrants where each quadrant suggests a
different type or a nature of a strategy:
• Aggressive
• Conservation
• Defensive
• Competitive
• There are 7 steps to develop a SPACE matrix.
SPACE Matrix
Steps to develop a SPACE matrix
1. Select a set of variables to define FS, CA,
ES, & IS
2. Assign a numerical value:
1. From +1 to +7 to each FS & IS dimension
2. From -7 to -1 to each ES & CA dimension
3. Compute an average score for each FS, CA,
ES, & IS
Steps to Developing a SPACE
Matrix
1. Plot the average score on the appropriate
axis.
2. Add the average scores of CA and IS on the
x-axis and plot the point.
3. Add the average scores of ES and FS on the
y-axis and plot the point.
4. Draw a directional vector from the origin
through the new intersection point.
Sample of a SPACE matrix
SPACE Matrix
BCG Matrix
Grand Strategy Matrix
• Tool for formulating alternative strategies
• Based on two dimensions
– Competitive position (X-axis): can be either strong
or weak, depending on such factors as market share,
ability of the firm to compete on price and quality,
customer recognition, etc.
– Market growth (Y-axis): can be considered as either
rapid or slow depending on the annual growth rate
(sales) within the particular market/ industry in
which the firm competes.
Grand Strategy Matrix
Rapid Market Grow
Quadrant 2: Quadrant 1:
Market penetration Market penetration
Market development Market development
Product development Product development
Horizontal integration Forward integration
Divestiture Backward integration
Liquidation Horizontal integration
Concentric diversification
Weak Strong
Competiti Competiti
ve Quadrant 3: Quadrant 4: ve
Retrenchment Concentric Diversification
Position Position
Concentric diversification Horizontal diversification
Horizontal diversification Conglomerate Diversification
Conglomerate diversification Joint Ventures
Divestiture
Liquidation
Slow Market Grow
Grand Strategy Matrix
Quadrant 2: Quadrant 1:
Evaluate present approach Excellent strategic position
seriously Concentration on current markets
How to change to improve and products
competitiveness Take risks aggressively when
Rapid market growth requires necessary
intensive strategy
Quadrant 3: Quadrant 4:
Compete in slow-growth Strong competitive position
industries Slow-growth industry
Weak competitive position Diversification indicated to more
Drastic changes quickly promising growth areas
Cost and asset reduction
indicated (retrenchment)
