Introduction
Every business needs effective strategic planning to capitalize and add value to the organization. Ginter et al. (2018) admit that adjusting strategies to the changing external and internal conditions is sometimes necessary. This information means that a firm should rely on statistical data to achieve the most significant benefits of strategic planning. Thus, the principal purpose of this paper is to show that SPACE, Grand, and QSP matrix analyses are useful to choose the most suitable strategies for a business.
SPACE Matrix Analysis
The SPACE matrix is a four-quadrant framework that determines whether an organization should follow conservative, aggressive, competitive, or defensive strategies. The model draws attention to both internal and external characteristic features. According to David and David (2016), the internal analysis focuses on current ratio, net income, market share, product quality, and other indicators.
At the same time, the rate of inflation, technological advancements, financial stability, profit potential, and others are components of an external audit (David & David, 2016). According to the SPACE matrix from Part I, the organization under analysis is in a conservative quadrant. The X-axis of -1 and Y-axis of 0.4 demonstrate that the firm suffers from competitive disadvantages in the industry. Consequently, the useful strategies include product development, market development, and market penetration.
Grand Matrix Analysis
The Grand matrix is a suitable tool to formulate alternative marketing strategies. Genoveva and Siam (2017) explain that this tool focuses on two evaluative dimensions, including a business’s competitive position and industry growth. The matrix also consists of four quadrants, and each of them offers specific strategies for a company. The Grand matrix from Part II demonstrates that the business under consideration can be positioned in Quadrants I and III.
Thus, Quadrant I means that the firm is in a beneficial strategic condition, meaning that market penetration and market development are suitable variants. However, Quadrant I also implies that the firm has significant competitive advantages, while the SPACE matrix has just revealed the company’s inefficiencies in this field. That is why Quadrant III shows that forward integration, product development, and related diversification are necessary changes to implement.
QSP Matrix Analysis
Since the information above has already presented numerous strategies, it is rational to draw attention to QSP matrix analysis. It is so because this tool compares various strategies and describes their attractiveness, drawing attention to critical external and internal factors (Fazlollahtabar, 2018). This matrix is based on SWOT analysis, where every external and internal factor is given an attractiveness score. According to David et al. (2017), the higher the attractiveness score is, the more beneficial this specific factor is.
Thus, the QSP matrix from Part III indicates that the most significant internal strength includes food quality, while advanced technology that can lead to higher sales represents the most attractive opportunity. That is why market development and market penetration are suitable strategies because they will allow the business under analysis to take the most significant advantages of its strength.
Conclusion
Strategic planning is necessary when one wants to contribute to the more effective performance of a firm. That is why it is rational to invest much effort and focus on specific data while developing such strategies. SPACE, Grand, and QSP matrix analyses draw attention to the firm’s internal and external factors. The paper has demonstrated that the most suitable strategies to capitalize and add value to the organization include market penetration and market development.
References
David, F. R., & David, F. R. (2016). Strategic management: A competitive advantage approach, concepts and cases (16th ed.). Pearson.
David, M. E., David, F. R., & David, F. R. (2017). The quantitative strategic planning matrix: A new marketing tool. Journal of Strategic Marketing, 25(4), 342-352.
Fazlollahtabar, H. (2018). Supply chain management models: Forward, reverse, uncertain, and intelligent foundations with case studies. CRC Press.
Genoveva, G., & Siam, S. T. (2017). Analysis of marketing strategy and competitive advantage. International Journal of Economic Perspectives, 11(1), 1571-1579.
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health care organizations (8th ed.). John Wiley & Sons.