SPACE

Strategic Position and Action Evaluation

The 4 Dimensions of SPACE

1. 2. 3. 4. Companys Financial Strength Industry Strength Environmental Stability Companys Competitive Advantage

Financial Strength
6 5 4 3 2

Competitive Advantage
-6 -5 -4 -3 -2

Industry Strength
1 2 3 4 5 6

-1 -2 -3 -4 -5 -6

Environmental Stability

Companys Financial Strength

Return on Investment Leverage Liquidity Capital Required/Capital Available Cash Flow Ease of exit from market Risk involved in the business

Industry Strength Growth Potential Profit Potential Financial Stability Technological Know-how Resource Utilisation Capacity Intensity Productivity, capacity utilisation

Environmental Stability Technological changes Rate of Inflation Demand Variability Price range of competing products Barriers to entry into market Competitive Pressure Price elasticity of demand

Companys Competitive Advantage

Market Share Product Quality Product Life Cycle Product Replacement Cycle Customer Loyalty Competitions Capacity Utilisation Technological Know-how Vertical Integration

Financial Strength
6 5 4 3 2

Competitive Advantage
-6 -5 -4 -3 -2

Industry Strength
1 2 3 4 5 6

-1 -2 -3 -4 -5 -6

Environmental Stability

 For example let us consider the business of Vyaapar Ltd., which considers four factors in each dimension as follows:
Factors Weight Rating Score (wt x rating) 1.00 1.00 1.20 0.88

Return on Investment Leverage Liquidity Risk involved in the business

0.25 0.20 0.30 0.25

+4 +5 +4 +3.5

Companys Financial Strength

1.00

4.08

Factors

Weight

Rating

Score (wt x rating) 0.90 1.20 0.45 1.00 3.55

Growth Potential Profit Potential Financial Stability Resource Utilisation Industry Strength

0.30 0.30 0.15 0.25 1.00

+3 +4 +3 +4

Factors

Weight

Rating

Score (wt x rating) -0.20 -0.30 -0.30 -0.35 -1.15

Technological changes Rate of Inflation Competitive Pressure Price elasticity of demand Environmental Stability

0.20 0.30 0.15 0.35 1.00

-1 -1 -2 -1

Factors

Weight

Rating

Score (wt x rating) -0.80 -0.60 -0.20 -0.40 -2.00

Market Share Product Quality Customer Loyalty Vertical Integration Companys Competitive Adv

0.4 0.3 0.2 0.1 1.00

-2 -2 -1 -4

Fig. 1

FS
Aggressive Posture

CA

IS

ES

Fig. 2

FS

CA

IS

Competitive Posture

ES

Fig. 3

FS

CA

IS

Defensive Posture ES

Fig. 4
Conservative Posture

FS

CA

IS

ES

Fig. 4

FS

Porters Suggested Strategies

Focus

Cost Leadership

CA
Differentiation Gamesmanship

IS

ES