Sample SPACE matrix · Tala Provisions, Inc.
The SPACE matrix reads a company's strategic posture from four dimensions: financial strength, industry strength, competitive advantage and environmental stability. Tala Provisions is rated on each. Change a rating and watch the point move between the aggressive, conservative, defensive and competitive quadrants. How it's scored
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How the SPACE matrix is scored
- List a few variables under each dimension.
- Rate financial strength (FS) and industry strength (IS) from +1 (worst) to +6 (best).
- Rate competitive advantage (CA) from −1 (best) to −6 (worst), and environmental stability (ES) from −1 (stable) to −6 (unstable).
- Average each dimension. Then x = IS average + CA average, and y = FS average + ES average.
The point (x, y) falls in one quadrant: aggressive (x and y positive), conservative (x negative, y positive), defensive (both negative) or competitive (x positive, y negative). A point exactly on an axis gets no quadrant and needs your judgment.
Each dimension is averaged, not summed, so a dimension with five variables counts the same as one with three.
Worked example: Tala Provisions
Tala's averages are FS +3.0, IS +4.7, CA −2.5 and ES −4.0, which place it at x = +2.2, y = −1.0: the competitive quadrant.
| Dimension | Factor | Rating |
|---|---|---|
| Financial strength | Return on investment | 3 |
| Financial strength | Cash from subscriptions | 4 |
| Financial strength | Debt level | 2 |
| Financial strength | Working capital | 3 |
| Industry strength | Growth potential | 5 |
| Industry strength | Profit potential | 5 |
| Industry strength | Use of roasting capacity | 4 |
| Competitive advantage | Bean quality | −2 |
| Competitive advantage | Market share | −4 |
| Competitive advantage | Customer loyalty | −2 |
| Competitive advantage | Control over bean supply | −2 |
| Environmental stability | Exchange-rate swings | −5 |
| Environmental stability | Price range of competing products | −4 |
| Environmental stability | Demand swings | −3 |
| Environmental stability | Barriers to entry | −4 |
| Financial strength average | +3.0 | |
| Industry strength average | +4.7 | |
| Competitive advantage average | −2.5 | |
| Environmental stability average | −4.0 | |
| Axes | x = IS + CA = +2.2, y = FS + ES = −1.0 | Competitive |
A competitive posture means an attractive industry and a real edge, held back by financial strength that is thin for an unstable environment. For Tala, the edge is bean quality and supply control. The instability is the peso, import duty and cheap 3-in-1 rivals. The method points such companies toward strategies that build on the edge without a large outlay of cash.
Look at which average drives the result. If financial strength rose, say from the cash the subscription brings in, y would climb toward zero and Tala would move toward the aggressive quadrant. That makes a useful sentence in a paper: it names what would have to change for the posture to change.
Where it fits
SPACE is one of five matching tools. It reads a different mix of evidence from the IE matrix and the Grand Strategy matrix, so they can disagree; where they agree, the case is stronger. The posture is one input to which TOWS strategies go into the QSPM.
Common mistakes
- Positive ratings on CA or ES. Those two run from −1 to −6. The editor rejects a wrong sign.
- Reading −1 on ES as bad. On environmental stability, −1 means stable and −6 means unstable.
- Using the SPACE quadrant as the answer. It narrows the kinds of strategy that fit; it does not pick one.
FAQs
Why are two dimensions negative?
It is how the SPACE method places the point: CA and ES pull the axes down or left, FS and IS pull them up or right.
How many variables per dimension?
There is no fixed number. Three to five well-chosen ones per dimension is common. Each needs at least one rating.
What if the point lands on an axis?
No quadrant is assigned. Review the ratings and explain your reading in the paper.
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