Learning objective
Grand strategy matrix is a last matrix of matching strategy
formulation framework. It same as important
as BCG, IE and other matrices. This chapter enables you to
understand the preparation of GS matrix.
The Quantitative Strategic Planning Matrix (QSPM)
The last stage of strategy formulation is decision stage. In
this stage it is decided that which way is most
appropriate or which alternative strategy should be select. This
stage contains QSPM that is only tool
for objective evaluation of alternative strategies. A
quantitative method used to collect data and prepare
a matrix for strategic planning. It is based on identified
internal and external crucial success factors.
That is only technique designed to determine the relative
attractiveness of feasible alternative action.
This technique objectively indicates which alternative
strategies are best.
The QSPM uses input from
Stage 1 analyses and matching results from Stage 2 analyses to
decide objectively among alternative
strategies. That is, the EFE Matrix, IFE Matrix, and Competitive
Profile Matrix that make up Stage 1,
coupled with the TOWS Matrix, SPACE Analysis, BCG Matrix, IE
Matrix, and Grand Strategy Matrix
that make up Stage 2, provide the needed information for setting
up the QSPM (Stage 3).
Preparation of matrix
Now the question is that how to prepare QSPM matrix. First it
contains key internal and external
factors. An internal factor contains (strength and weakness) and
external factor include (opportunities
and threats). It relates to previously IFE and EFE in which
weight to all factors. Weight means
importance to internal and external factor. The sum of weight
must be equal to one. After assigning the
weights examine stage2 matrices and identify alternatives
strategies that the organization should
consider implementing. The top row of a QSPM consists of
alternative strategies derived from the
TOWS Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and Grand
Strategy Matrix. These matching
tools usually generate similar feasible alternatives. However,
not every strategy suggested by the
matching techniques has to be evaluated in a QSPM. Strategists
should use good intuitive judgment in
selecting strategies to include in a QSPM. After assigning the
weight to strategy, determine the
attractiveness score of each and afterwards total attractiveness
score. The highest total attractiveness
score strategy is most feasible.
Steps in preparation of QSPM
1. List of the firm's key external opportunities/threats and
internal strengths/weaknesses in the left
column of the QSPM.
2. Assign weights to each key external and internal factor
3. Examine the Stage 2 (matching) matrices and identify
alternative strategies that the organization
should consider implementing
4. Determine the Attractiveness Scores (AS)
5. Compute the Total Attractiveness Scores
6. Compute the Sum Total Attractiveness Score
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Limitations
1. Requires intuitive judgments and educated assumptions
2. Only as good as the prerequisite inputs
3. Only strategies within a given set are evaluated relative to
each other
Advantages
1. Sets of strategies considered simultaneously or sequentially
2. Integration of pertinent external and internal factors in the
decision making process
Key Internal Factors
Research and Development
Computer Information
Finance/Accounting
Production/Operations
Management
Marketing
Systems
Key External Factors
Economy conditions
Social/Cultural/Demographic
/Environmental
Political/Legal/Governmental
Competitive
Technological
Consumer attitude
Strategy 1
AS TAS
Strategy 2
AS TAS
Strategy 3
Weight AS TAS
