The SPACE Matrix and its implications

SPACE Matrix is an acronym of Strategic Position and Action Evaluation Matrix. The analysis allows to create an idea of the appropriate business strategy for the enterprise. The analysis assesses the internal and external environment and allows to design an appropriate strategy.

Internal Strategic Position

  • Financial Strengths (FS)
    • ROI
    • Leverage
    • Liquidity
    • Working Capital
    • Cash Flow
    • Inventory turnover
    • EPS
    • PE Ratio

  • Competitive Advantage (CA)
    • Market Share
    • Product Quality
    • PLC
    • Consumer Loyalty
    • Competition’s capacity Utilization
    • Technological Know-how
    • Control over suppliers and distributors


External Strategic Position

  • Environmental Stability (ES)
    • Technological changes
    • Rate of inflation
    • Demand variability
    • Price range of competing products
    • Barriers to entry into market
    • Competitive pressure
    • Ease of exit from market
    • Price elasticity of demand
    • Risk involved in business

  • Industry Strength (IS)
    • Growth Potential
    • Profit potential
    • Financial Stability
    • Technological know-how
    • Resource utilization
    • Easy of entry into market
    • Productivity, capacity utilization


SPACE Analysis for Strategy Profiles

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