Strategic Position and Action Evaluation (SPACE)
The SPACE matrix determines whether you should use an aggressive, conservative, defensive, or competitive approach for your business strategy. As you learned about in Unit 2, internal and external organizational analysis is necessary to use this tool. As you read through this section, think about the advantages and disadvantages of each. The SPACE matrix is yet another tool to help you determine your potential strategy. After you read this content, you will be able to identify the internal and external strategic positions to consider when using this tool.
Method
Qualitative
This study conducts interviews to identify the factors to enrich the understanding according to the theoretical framework that aims to point out the competitiveness states of the business, suggest strategic postures, and to point out how the managerial perceptions of employee work contributions are supportive of the perceived competitiveness states as determined by the SPACE matrix.
Quantitative
This study further conducts quantitative approach in order to design and get the managers and employees to fill up the questionnaires for comparative study purpose. The data is analyzed by use of correlations and simple regression analysis, and perceptual gap analysis.
SPACE Analysis
SPACE method exploits case study method, by taking the form of qualitative interviews with the managers. SPACE stands for Strategic Position and Action Evaluation, which is one of the strategic management tools that have gained "high reliability for considering macroeconomic, micro economic and financial factors in the process of determining the position of the organization".
The SPACE matrix is formed of both internal and external dimensions of strategic importance to organization. The internal dimension is described by competitive advantage and financial stability. The external dimension is described by environmental stability and industry strength.
The collective assessments of both internal and external dimensions of strategic conditions lead to four possible strategic postures anorganization can position itself in its industry: (1) Aggressive, (2) Competitive, (3) Conservative, and (4) Defensive. Aggressive position posture – is typical in an attractive industry (high industry strength) with stable economic conditions. A competitive position posture – is characteristic of an attractive industry (high industry strength) in a relatively unstable environment. Conservative position posture – is distinctive of a low growth but stable market. The focus is on financial stability, while product competitiveness is the critical factor. Defensive position posture – is an unattractive industry where competitiveness is the critical factor. In short, SPACE matrix is used to assess and propose coherency of business strategy in matching both the internal and external environment.