STRATEGIC TOOLS:

1. Space Matrix Tool

2. Value Chain Analysis
Presented to: Dr. Amir Raslan
Presented By:

Emran Bin Ismail

G1317529

Abdirisak Mohamed Ali

G1235995

Amir Syafiq Bin NOORDIN

G1311181

Abdulalim Tahir

G1324365

INTRODUCTION

Space
Matrix

The SPACE matrix is a management tool used to analyze a company. It is used to

determine what type of a strategy a company should undertake.
Why we use: The SPACE matrix is a management tool used to analyze a company. It is
used to determine what type of a strategy a company should undertake its can be
used also as a basis for other analyses, such as the SWOT analysis, BCG matrix model,
industry analysis, or assessing strategic alternatives (IE matrix)
When to use it:
It is used during strategic formulation
Best to use when finding the competitive position of an organization.
The SPACE matrix is broken down to four quadrants where each quadrant suggests a
different type or a nature of a strategy:
1. Aggressive

2. Conservative

3. Defensive

4. Competitive

Financial Strength (FS)

Return on Investment
Leverage
Liquidity
Working Capital
Cash Flow
Ease of market exit
Risk involved in business
Competitive Advantage (CA)
Market share
Product quality
Product life cycle
Customer loyalty
Competitions capacity utilization
Technological know-how
Control over suppliers &
distributors

Environmental stability (ES)

Technological changes
Rate of inflation
Demand variability
Price range of competing products
Barriers to entry into market
Competitive pressure
Price elasticity of demand

Important determinants of
organizations overall strategic
position

Industry Strength (IS)

Growth potential
Profit potential
Financial stability
Technological know-how
Resource utilization
Capital intensity
East of entry into market
Productivity, capacity utilization

SPACE MATRIX CALCULATION

EXAMPLE

McDonalds SPACE Matrix

FS

Conservative

Aggressive

+6
+5
+4
+3
+2
+1

CA

IS
-6

-5

-4

-3

-2

-1

+1

-1

+2

+3

+4

+5

-2
-3
-4

Defensive

Competitive

-5
-6

OMalley, Ouellette, Plourde, & Roy 2009

ES

+6

CONCLUSION
SPACE MATRIX TOOL
Strategic Position and Action Evaluation (SPACE) Matrix
Variables from Internal Factor Evaluation (IFE) External Factor Evaluation (EFE)
matrix.
Depending on the particular environment, strategies will be developed
Penetration, development, diversification and etc..

2nd TOOL:
Value Chain Analysis
It describes the activities that take place in a business and relates them to
an analysis of the competitive strength of the business.
could be grouped under two headings:
(1) Primary Activities - those that are directly concerned with creating and
delivering a product (e.g. component assembly)
(2) Support Activities, they are not directly involved in production, may
increase effectiveness or efficiency (e.g. human resource management).
Advantages:
Increase your competitiveness
Reduce your costs
Improve your market share
Bottom Line - improve
overall profitability!

COMPANY VALUE CHAIN

COMPANY VALUE CHAIN

PRIMARY
ACTIVITIES
AND COSTS

Inbound Logistics
-selection of
contractors
-material
procurements

Operations
-BPA approval
-Construction

Marketing and
Sales
-Promotion
-Roadshow
-Sales
Administration

Outbound
Logistics
-Quality check
-CCC
-HOVP

Services
Complaints
management
-Defect rectifications
Project close out
report

P
R
O
F

SUPPORT
ACTIVITIES
AND COSTS

PRODUCT DEVELOPMENT, IT, INNOVATION, SYSTEM DEVELOPMENT (PMO)

HUMAN RESOURCE MANAGEMENT (COMPENSATION, TALENT MANAGEMENT)

GENERAL ADMINISTRATION (SPACE PLANNING, CORPORATE COMMUNICATION)

Performing a Value Chain Analysis

To gain a differentiation advantage:

Identify the value creating activities for the customer, and focus on the specific actions

Evaluate the differentiation strategies to improve value to the customer

Identify the best differentiation method that is sustainable long term

To gain a cost advantage:

Determine the primary activity of the company, and all the support activities performed

Look at each activity at all value chains

Analyze how the work is done surrounding every separate activity, and identify how it adds customer value

Rank each activity in terms of relative importance to the total cost of the product

Investigate all of the costs of producing the product

Identify all of the cost drivers, for every activity.

CONCLUSION
Introduction
-Background

Usage

Application

Conclusion