Christine Hemadeh

ID: 201900524

AMAZON
SPACE MATRIX
The Strategic Position and Action Evaluation (SPACE) Matrix is a strategic management tool that helps
analyze a company's competitive position in the market. The SPACE Matrix considers four strategic
dimensions: Stability, Competitive Position, Industry Strength, and Environmental Stability. Each
dimension is assessed using specific internal and external factors.

The following is a simplified and hypothetical example of a SPACE Matrix for Amazon:

Internal Strategic Dimensions:

1. Financial Position (FP): Strong

2. Competitive Advantage (CA): Strong
3. Stability of Operations (SO): Strong
4. Management and Staff (MS): Strong

External Strategic Dimensions:

1. Industry Growth Rate (IGR): Rapid

2. Demand and Supply Conditions (DSC): Favorable
3. Technological Change (TC): High
4. Barriers to Entry (BE): Low

SPACE Matrix Interpretation:

Quadrant I indicate that Amazon is in a strong competitive position and faces a dynamic external
environment with opportunities for growth. The recommended strategy would be an aggressive one,
focusing on market penetration, product development, diversification, or other aggressive strategies.

SPACE MATRIX:

Strategic Position and Action Evaluation (SPACE) matrix is a management tool that is used to analyze an
organization based on four dimensions, two internal and two external that helps to define an
appropriate strategy for organization.

Internal:
Financial Strength

1. Return on Assets
2. Leverage
3. Liquidity
4. cash flows
 Competitive advantage:

1. Market share
2. Product quality
3. Brand and image
4. Product life cycle

External:
Industry strength:

1. Barrier to entry
2. Growth potential
3. Access to financing
4. Financial stability

Environmental stability

1. Inflation
2. technology
3. demand variable
4. taxation

Strategic Positioning and Action Evaluation (SPACE) is a matrix used by a company to determine what
strategy is most appropriate to implement.
 INTERNAL STRATEGIC POSITION OF AMAZON:
COMPETITIVE ADVANTAGE (CA)
Key factors: Description

Product Quality: The products traded on Amazon have good quality, so consumers are very loyal.

Market share: Amazon has become a market leader in the e-commerce business.

Brand and image: Amazon has a good image because this company is a company that has been in this
business for a long time before Albaba.

product life cycle: The company's sales process has reached maturity because it is now focused on the
supply chain of delivering goods to customers.

FRANCIAL STRENGTH (FS)

key factors: Description

ROA: With the assets, you can generate a return of 7.11%, which is very good because with many assets
you can make a profit of 7.11.

Leverage-LV: Shareholders in the USA spend a lot of capital to enable the company to grow rapidly,

Liquidity-LO: Using the Current ratio allows the company to pay off its debts in the short term.

Cash Flow-CF: The company's cash flow generated in 2018 was $10,3178, which experienced a rapid
increase compared to the previous year.

EXTERNAL STRATEGIC POSITION

INDUSTRY STRENGTH
KEY FACTORS: Description

Barrier to Entry: The obstacles faced by entrepreneurs who have just entered this business are very easy
if there is a large enough source of funding because they will carry out quite a lot of products.

Growth Potential: Amazon sales growth in the last 2 quarters has decreased, Amazon does not share the
data it has with partner companies because their goal is to be number 1 so that competitors can target
its company.

Access to Financing -AF: Stakeholders are responsible of funding the company.

Financial Stability- FS: in the USA, companies receive abundant funds from shareholders, so their
financial stability depend on it.
 INVIRONMENTAL STABILITY
KEY FACTORS: Description

Inflation: Inflation in the USA is still within reasonable limits so that it can make companies experience
growth.

Technology: the Company develop their technology in the field of supply chain so that it can evaluate
with the evaluation of technology

Demands: They already use drones as a means of delivery. Amazon only controls 2% of the American
market, but consumers from South America and Europe make them the market leader in the world.

Taxation-TX: USA experienced a decrease to 21% and 35%, this means that companies also have less
costs to pay taxes.

Analysis of SPACE matrix

Amazon has good Financial and Industry strength.

It should aggressively enter the market.

Analysis of SPACE matrix

Amazon has good Financial and Industry strength.

It should aggressively enter the market.