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.
Data Analysis and Result
The surveyed demographics are shown in Fig. 5-7, which highlights that 58% are manufacturers, and 42% are traders. There are 5 manufacturers (M) participated, and seven traders (T) participated. Twenty-six per cents are located in Thasud, Chiang Rai, 30.1% located in Nang Lae, Chiang Rai, and 43.9% located in Ban Du, Chiang Rai.
Fig. 5: Demographics –Business Type
Fig. 6: Demographics –Company Code
Fig. 7: Demographics Data –Company Location
The interviews lead to the identification of themes "job resources-job demand", and motivation-related organizational factors that the managers perceived important to drive workforce contribution to support organizational performances:
"Job resources i.e.,guideline for production, work condition, supervisory support, and team spirit", "job demand i.e.,operations requirement for time to completion," and "motivation i.e.,salary". From the theory of planned behavior, the employees would perceive these factors as perceived behavioral control (PBC).
In the aspect of workforce-contributed organizational performance, the managers point out three important aspects, namely:
Cognitive –in terms of ideas and problem-solving contribution, which is a sort of extra-role and in-role behavioral contribution to the organization.
Organizational –i.e.,process improvement, product quality, on-time delivery.
Affective –i.e.,feeling and job commitment, which is the affective necessity for organizational performance.
The positive relationship between PBCs and the perceived organizational performance is evidenced in Fig. 8.
Fig 8: Performance versus Perceived Behaviors Control Factor
The employee-induced performance can directly contribute to improve the competitive advantage and financial stability of the organization, as shown in Fig. 9. Nevertheless, Fig. 9 indicate two obvious clusters, namely the manufacturers and the traders, with the lower level of values corresponding to the traders shown in the front portions of the 3D density plots. The companies with higher perceived competitive advantages also show better financial stability.
Fig. 9: Linking between Organizational Factors and Performance
Apart from the 3D density plots, the perceptual gaps between the manufacturers (5 of them) and the traders (7 of them), and between the managers (12) and the employees (312) participated in the surveys can also be shown in Fig. 10.
Fig. 10: Perceptual Gaps between Manufacturers and Traders, and between Managers and Employees
We also found that the workforce-contributed organizational performance is shown more able to predict the internal competitive advantage of the company than financial stability. No significant pattern is obvious on the external conditions –both environmental stability and industrial strength, as shown in Fig. 11.
Fig. 11: Simple Regression Analysis and Correlations
In view of the external competitive conditions (industry strength and environmental stability) and the strengths and weaknesses of the pineapple factories (characterized by competitive advantage and financial stability), the SPACE analysis,as shown in Table 1,suggestsit is more appropriate to formulate competitive strategies using"aggressive posture" for the manufacturers, and "competitive posture" for the traders.
Table 1: The SPACE Outcome
Regarding aggressive posture, we discussed with the managers and recognized their strategies of how they are being aggressive, as follows:
"We are expanding our targeted markets, not only to China, but also to Myanmar. Furthermore, we are expanding our product lines such as export not only fresh-cut mini-pineapples but also other tropical fruits like mangosteen and durian, making use of the resources we already have or can acquire further". (Manufacturer with aggressive posture)
"We always get in touch with our employees by listening to their suggestions, ideas and problems. And when we see there is something wrong, we correct it immediately, or when their ideas help on, we invest on them to improve our competitiveness i.e.,productivity of our process, and quality". (Trader with aggressive posture)
"It is true that we are doing business for profit. But what we do more is that we treat our final customers like we treat ourselves and the person we love or care. What we do should meet the requirement and expectation of our final customers. Thus, we continue to invest on ways to improve our businesses and our products to meet not only our immediate customers but the consumers. Success depends on us investing on our market" (Manufacturer with aggressive posture)
However, there are two traders that are in aggressive posture, and both are trying to become a manufacturer by collaborating with each other (that is: collaborative strategy, in order to implement the competitive strategy, such as to improve financial conditions and competitive advantages). Their opinions on competitive strategies are reflected in the following:
"We know our traders have certain weaknesses, probably lacking of financial resources. Thus, we share our knowledge with them to help them improve their competitive edge".
"When compare we with the manufacturers, we think they are in better advantage, both financially and in certain resources. This motivates us to become a manufacturer, but our financial situation is not strong enough". (Trader with competitive posture)
Thus, we observe that traders are not in aggressive posture in which most of them are having financial instability. The manufacturer positions exhibit the appropriateness for an aggressive strategic posture, and the government policy should support the manufacturers as the factories of fresh-cut mini-pineapples to become more aggressive to have more competitive advantage in Chiang Rai.