Space analysis on the example of a school. Method of using SPACE-analysis in assessing bar activity. Factors Determining a Firm's Competitive Advantage

Send your good work in the knowledge base is simple. Use the form below

Students, graduate students, young scientists using the knowledge base in their studies and work will be very grateful to you.

Similar documents

Concept cluster analysis in marketing as a method of classifying objects according to given criteria. The principles of group formation: conditions, conditions of internal homogeneity and external heterogeneity. Application of this method to analyze clients of a fitness club.

thesis, added 12/17/2012

Concept, essence and objects of the method of functional cost analysis. Principles, forms of functional and cost analysis and its scope. Implementation of accounting by the method of functional and cost analysis. Saving materials and labor costs.

test, added 08/08/2008

Using the concept of logistics in the management of the company's inventory. Economic essence reserves and their classification. Cost structure for the formation and maintenance of stocks. Content and scope practical application ABC analysis and XYZ analysis.

lecture added 06/01/2009

Systematization of matrices strategic analysis... Opportunity matrix by product. Analysis of priority competitors and determination of the strength of their position. Strategic analysis of the industry and competition. Development of activities that provide a management strategy.

term paper, added 12/25/2013

Quantitative marketing research, their goals and objectives. Sampling techniques. Advantages and disadvantages of the survey method. Free, non-standardized, formalized, semi-standardized interviews. Features of the hall test.

abstract, added 06/19/2015

Characteristics of the state and development prospects of the industry, analysis of its competitive situation and attractiveness. Analysis of the strengths and weaknesses of the organization in a competitive environment, the procedure and principles of this analysis, assessment of its purpose.

abstract, added 02/19/2011

Basic means of generating demand and stimulating sales, their advantages and disadvantages. Activity on the formation of demand and sales promotion at the LLC TD "UKHK Ice Vita", market potential analysis, competitive positions of network structures.

thesis, added 04/30/2012

The methods of situational analysis, with a certain convention, include the method of SPACE-analysis (strategic position and action estimation), designed to analyze the strategic position and assess the actions of an organization.

The SPACE method is that four groups of factors are analyzed for the organization. Each factor is assessed by experts on a scale from zero to six. The factors of the four groups are sequentially presented in table. 4.10–4.13.

Table 4.10.Environment stability factors ( ES)

Technological changes
Inflation rate
Demand volatility
Competitive product price range
Obstacles for market access
Competitive pressure
Price elasticity of demand	Inflexible

Table 4.11. Industrial potential factors (IS)

Growth potential
Profit potential
Financial stability
Technology level
Resource utilization	Ineffective	Effective
Capital intensity
Ease of market access
Productivity, utilization of production facilities

Table 4.12.Competitive advantage factors (CA)

Market share

Small

Product quality

Product life cycle

Elementary

Finite

Product replacement cycle

Fixed

Replaceable

Customer loyalty

Capacity utilization by competitors

Vertical integration

Table 4.13.Financial potential factors ( FS)

Return on investment
Financial dependence	Unbalanced	Balanced
Liquidity
Required / available capital
Flow of funds
Ease of leaving the market
Enterprise risk

Having estimated the value of each factor, it is necessary to calculate the average value of the factors for each group, then postpone the obtained values \u200b\u200bon the coordinate axes shown in Fig. 4.14.

The implementation of this evaluative approach allows you to build a quadrilateral of one of the types shown in Fig. 4.15, characterizing the proposed four types of strategic positions of the competing organization, which are also presented in table. 4.14.

This method uses an approach to the analysis of the external and internal environment, similar to that used in the SWOT analysis. The factors of stability of the situation partially characterize the factors of the external environment, without a clear identification of opportunities and threats. Competitive advantage, industrial and financial potential factors are part of the analysis internal environmentpresented in the SWOT analysis in much more detail.

The advantages of the SPACE analysis method include the following.

1. Clear logic of the analysis.
2. Possibility to make an assessment purely formally and quickly. But this attractive side of this method can be the reason for choosing the wrong recommendations.
3. Possibility of defining consolidated strategic positions (by no means all).
4. Visual presentation of the results obtained and recommendations for the choice of directions of action.

Figure: 4.14.

In our opinion, the developers of this method have significantly exaggerated its merits, claiming that it can be used to determine the most advantageous strategic position for a company, as well as certain areas of its activity. And that it is a tool that helps a company assess the overall attractiveness of its business area and its ability to compete in markets.

However, the disadvantages of this method of analysis greatly exceed its advantages.

1. Groups of factors are presented without substantiation of the selection of these particular groups of factors. Why is it proposed four and not a different number of groups of factors? What are the principles of their selection? Both external and internal factors are "mixed" in these groups.
2. The groups of factors include a far from complete list of these factors, and the inclusion of factors in individual groups is sometimes random in nature, not arising from the consistent use of some specific classification features.

Figure: 4.15.

Table 4.14. a brief description of possible strategic positions of the competing organization

Strategic position		Brief description of strategic positions
Aggressive		This position is typical of an attractive industry with little ambiguity. The competing organization receives competitive advantages that it can maintain and increase with the help of financial potential. Threats are insignificant, it is necessary to concentrate on ensuring the achievement of the set goals. Actions are aimed at: expanding production and sales;
		active pricing policy in relation to competitors;
		development of new market segments;
		brand promotion
Competitive	This position is characteristic of an attractive industry. A competing organization gains a competitive advantage in a relatively volatile environment. Financial capacity is a critical factor. It is necessary to fend off threats associated with the loss of funding. Basic actions: search financial resources;
	development of sales networks
Conservative	This position is usually seen in stable markets with low growth rates. In this case, efforts are focused on financial stabilization. The most important factor is the competitiveness of the product. Basic actions: cost reduction while improving product quality;
	reduction of production and entry into more promising markets
Defensive	This position arises in a situation where a competing organization operates in an attractive industry, but it lacks the competitiveness of products and funds. The key actions are: special attention to the mechanisms of countering threats; leaving the market

For example, a group of factors called "industrial potential" includes factors of both external and internal environment that characterize not only the size of the potential (growth potential, profit potential), but also the level of its use (degree of resource use, productivity). Not all factors of "industrial potential" are taken into account. For example, there are no human resources factors in this section. It is possible to give such examples of an incorrect approach to the choice of factors for other groups of factors of this method. Financial stability refers to financial factors, not industrial potential factors.

3. There is a repetition of the factors placed in different sections of the methodology in slightly modified formulations.

For example, the factor "barriers to market access" is included in the group of factors of stability. In another formulation - "ease of access to the market", such a factor is placed in the group of factors "industrial potential". Besides, what does the industrial potential have to do with it?

4. A partial repetition of the factors placed in one section of the methodology should be noted.

For example, factors such as "barriers to market access" and "competitor pressure" are included in the factors of stability. The last factor is one of the causes of the previous factor.

5. The list of strategic positions of the competing organization is presented without any justification.

The number of possible combinations of the values \u200b\u200bof the four groups of factors significantly exceeds the selected four strategic positions. It would be more correct, when identifying strategic positions, to set not the point value of individual groups of factors, but the interval value, falling into which is the basis for making recommendations for choosing a course of action. This approach is used, for example, in a number of portfolio techniques in the matrix GE / McKinsey.

6. To assess even quantitative meaningful indicators, only point expert estimates were used.

You can also cite other logical contradictions and meaningful errors of this method. Its use seems to disorient marketers. The content and practical value of this technique do not correspond to its "cosmic" name (eng. space - space). Probably for these reasons this method not covered in well-known marketing publications.

It seems that to solve problems of assessing the position of an organization and setting goals for its development, the ideas of a balanced scorecard - BSC (balanced scorecard ), set forth, for example, in the work. This system is designed to formulate the goals and strategies of a competing organization based on the assessment of its activities based on four balanced groups of quantitatively measured indicators: 1) finance (return on investment and added value); 2) customer relationship (meeting customer needs, maintaining and expanding customer base and market share); 3) internal business processes (quality, order fulfillment, cost, development of new products) and 4) training and professional development of personnel (personnel satisfaction and availability information systems). The choice of groups of indicators and the BSC indicators themselves are logically justified and well reasoned. It is possible to propose to assess the level of achievement of the SPP indicators using one of the measurement scales, for example, as in the SPACE analysis. Further, depending on the results of such analysis and the capabilities of the competing organization, goals are set for each indicator and the means of achieving them are selected. This approach to goal setting can also be useful in gap analysis (see below).

Other translations include a balanced scorecard, a balanced scorecard, or a scorecard.

The methodology is based on the analysis of the position of the firm and the conditions of its functioning in four coordinates that characterize the immediate and macroenvironment of the firm, as well as its internal potential: the attractiveness of the industry, the stability of the economic environment, the competitive advantage of the firm and its financial position... The assessment is usually carried out according to the 6-8 most significant parameters for the company for each of the coordinates by the method of expert assessments using a special scale:

results score criteria by the SPACE method are presented in Table 3.space paretto matrix clemar

Table 3. Results of scoring criteria

Criteria	Weight	Generalized score
The financial strength of the enterprise
Return on investment
Financial independence
Enterprise solvency
Financial risk level
Overall criterion assessment
Enterprise competitiveness
Market share
Product quality
Customer loyalty
Net profitability of services sold
Product life cycle
Overall criterion assessment
Industry attractiveness
Growth potential
Profit potential
Technology level
Ease of market access
Overall criterion assessment
Industry stability
Development level of innovative activity
Inflation rate
Demand volatility

Competitive pressure
Overall criterion assessment

Based on the results of the constructed matrix of strategic position and assessment of actions, it can be concluded that PKP Clemar LLC takes a dual strategic position: “aggressive” and “conservative”.

1) "Aggressive" position:

This is typical of an attractive industry with little ambiguity. The company gains competitive advantages, which it can maintain and increase with the help of financial potential. Threats are insignificant, it is necessary to concentrate on securing interests. The mechanisms are aimed at:

· Expansion of production and sales;
· Price war with competitors;
· Development of new market sectors;
· Promotion of brands;

This condition is usually seen in stable markets with low growth rates. In this case, efforts are focused on financial stabilization. The most important factor is the competitiveness of the product. Basic mechanisms:

· Reducing the cost while improving the quality of the goods;
· Reducing production and entering more promising markets;

SPACE-analysis (SPACE (space) - Strategic Position and Action Evaluation (assessment of strategic position and action) is one of the tools for diagnosing the position of a company in the market space and determining strategic alternatives for its development. four parameters:

1. Competitive advantages of the company

2. The financial position of the company

3. Attractiveness of the industry

4. Stability of the economic environment.

The result of the analysis should be an expert assessment of each of the specified parameters that determine the strategic position of the company, on a 6-point scale (Table 7) and their graphic interpretation (Figure 1).

Table 7 - Values \u200b\u200bof parameters that determine the strategic position of the firm

Figure 1 - Coordinate system for determining the strategic position of the firm

Parameter values \u200b\u200b(points) should be plotted along each axis of the coordinate system. At the same time, in order to obtain an appropriate graphic interpretation, it is necessary to adjust the assessments of the stability of the environment and competitive advantages by subtracting 6 points from them. For example, if the stability of the environment was rated at 5 points, then this will be reflected as (-1) on the CC axis.

By sequentially connecting all the points marked on the coordinate system, we get one of the graphs shown in Figure 2 and corresponding to a certain strategic position of the firm. Moreover, as you can see, the arrow corresponds to the largest (in area) of the resulting triangles.

KP Software KP Software

A) Aggressive position B) Competitive position

KP Software KP Software

C) Conservative position D) Defensive position

Figure 2 - Strategic positions of the organization

AND) Aggressive stance typical for attractive industries in a stable environment. The analyzed organization has an undeniable competitive advantage and can keep it using the available financial potential.

Critical factor - the ability to resist the emergence of new competitors.

1 Search for takeover candidates in own and related industries;

2 Increase in market share;

3 Concentration of resources on products that provide the greatest competitive advantage.

Firm behavior Is the behavior of a scout, implying a desire to investigate as much as possible more alternatives, loose, decentralized control, not always full use resources.

B) Competitive position typical of attractive industries in a relatively volatile environment.

Critical factor - the ability to maintain and strengthen the financial position of the company.

1 Accumulation of additional financial resources to enhance market potential;

2 Strengthening the implementation (sales) service;

3 Expansion and / or adjustment of the range of products;

4 Investing in increasing productivity;

5 Cost reduction;

6 Measures to protect and maintain a competitive advantage in a shrinking market;

7 Merger with a company with significant cash resources.

Firm behavior Is a deep reaction line. As a consequence, this position turns out to be strategically unstable and often leads to collapse.

IN) Conservative position typical for stable, slow-growing markets.

Critical factor - product competitiveness.

1 Reduction of assortment;

2 Cost reduction;

3 Concentration on managing the flow of payments;

4 Additional protection of competitive products;

5 Development of new products;

6 Attempt to penetrate more attractive markets.

Firm behavior Is the analyst's behavior. The firm's policy is based on a thorough analysis of the opportunities available on the market and their careful use.

D) Defensive position typical for unattractive industries in which companies lack both competitive products and financial resources.

Critical factor - the competitiveness of the company as a whole.

1 Leaving the market;

2 Termination of production of low-profit products;

3 Aggressive cost reduction;

4 Reduction of surplus production capacity;

5 Refrain from or minimize investment.

Firm behavior - this is the behavior of the defender: the desire to highlight a narrow area of \u200b\u200btheir interests and defend it. Hence - the concentration of resources, centralization of management.

A more accurate assessment of the strategic position of a firm requires the study of a set of factors or indicators that characterize the competitive advantages of the firm and its financial position, the attractiveness of the industry and the stability of the economic environment.

1. Competitive advantage of the company can be characterized following indicators:

Market share Is the relative market share, which can be measured by the ratio of the sales volume over a certain period of time to the sales volume of the leading competitor of the studied enterprise.

Product quality - relative expert assessment of the quality of the product of the studied enterprise in comparison with the products of competitors.

- a concept widely used in strategic planning. In most cases, it is customary to distinguish four stages: the stage of introduction (also called embryonic), the stage of growth, the stage of maturity and the stage of decline. The stage of bringing a product to the market is characterized, first of all, by the spread of awareness of the existence of a new product among potential consumers. Differentiation during this period is small, demand is price inelastic, and economies of scale are negligible. The maturity stage is characterized by rapid sales growth. Competitive product differentiation is increasing, economies of scale are increasing, and demand is becoming more price elastic. The maturity stage is characterized by a high degree of product differentiation, pronounced market segmentation, significant economies of scale, and price elasticity of demand. The stage of decline is characterized by intensification price competition, exceptionally high elasticity, while maintaining significant economies of scale.

In the SPACE method life cycle product, similarly to other indicators, is evaluated on a scale of 0-6, which makes it possible to more subtly assess the position in the dimension under consideration.

Product replacement cycle - characteristic of the degree of certainty of the life of the product (the duration of its life cycle).

Consumer commitment - characterization of the degree of customer loyalty to the brand.

The use of production facilities from competitors.

Technological know-how - characteristics of technological expertise (knowledge, experience) at the exclusive disposal of this company.

- vertical integration refers to the association within one organization of the links of the same production chain. For example, a furniture manufacturer acquires a logging business (reverse vertical integration) or a furniture store (forward vertical integration).

2. The financial position of the company characterized by the following indicators:

Return on Investment (ROI) calculated as the ratio of profit to invested capital (equity).

Financial leverage measured by the ratio equity capital to borrowed funds.

Liquidity - as a measure, you can use the indicators of the current or absolute liquidity... It should be emphasized that the authors of the methodology proceed from the thesis that the maximum liquidity.

- a qualitative assessment of the degree of satisfaction of the firm's capital needs. It can be produced by calculating the ratio of the available capital to the required one.

- real transfers are meant.

Ease of exiting the market - it means the amount of financial losses associated with the exit of the market and the re-profiling of the company.

Business risk - the assessment should take into account both market and political risk factors in the company's activities.

Inventory turnover- one of the possible additional factors in assessing the company's performance.

3. Industry parameters (factors determining its attractiveness) The SPACE method uses the following.

Growth potential - associated with an assessment of the total market capacity and the availability of appropriate production resources.

Potential profitability - an estimate of the rate of return that may develop in the industry.

Financial stability - we mean the conditions of functioning of an average, typical enterprise in a given industry.

Technological know-how - a qualitative characteristic of the level of technological expertise required to work in the industry.

Resource usage - assessment of the efficiency of resource use at the enterprises of the industry (in comparison with other industries).

Capital intensity.

Ease of market entry - a qualitative assessment of the factor, taking into account the entire complex of actions. Which must be undertaken to enter the market: implementation of one-time capital expenditures, image creation, etc.

Performance, capacity utilization.

4. Factors determining the stability of the environment, the following:

Technological changes - a qualitative assessment of the multiplicity of ongoing technological innovations.

Inflation rate.

Demand variation - characteristic of the stability of demand.

– important characteristic the degree of market maturity and the level of price competition.

Barriers (restrictions) to enter the market - necessary licenses, qualification requirements, exclusive rights already granted to other firms, etc.

Competitive pressure – general characteristics the level of competition in the industry.

Price elasticity of demand - the statistically estimated degree of influence of price changes on demand.

Each factor is also assessed on a 6-point scale, for which the table below is used (Table 8).

Table 8 - Values \u200b\u200bof factors that determine competitive advantages, the financial position of the company, the attractiveness of the industry and the stability of the environment

Continuation of table 8

Literature

Send your good work in the knowledge base is simple. Use the form below

Students, graduate students, young scientists using the knowledge base in their studies and work will be very grateful to you.

Posted on http://www.allbest.ru/

Job

By discipline:

"Organization and management of the enterprise"

SPACE analysis

Moscow, 2011

1. SPACE-andnaliz

Another method of constructive analysis follows directly from SWOT analysis - SPACE analysis. It is based on the statement that the financial strength of the enterprise is FS (“ strong point", According to the component -" finance ") and the competitiveness of products - KP (" strong side ", according to the component -" products ") are the main factors that determine the strategic position of the enterprise, while the advantages of the industry - software and market stability - SR are characteristics, important for the industry as a whole.

In SPACE analysis, these factors are plotted in the form of graphs with a coordinate scale division from -6 to +6. All factors have two types of characteristics: significance (V) and probability (P) of action. At the same time, two factors are determined that the enterprise uses to the greatest extent and which relate it to a certain qualification group (positions).

Aggressive stance is typical of an active and stable industry in which the company has certain advantages. The emergence of new competitors is critical. The position allows you to actively respond to changes in the market situation, increase your market share, increase the competitiveness of products: 1) financially strong enterprise with a competitive product in a stable and growing market; 2) a financially strong enterprise in which financial and economic advantages play a significant role.

Competitive position is typical for active but relatively unstable industries and markets in which the company's products have a competitive advantage. The financial potential of an enterprise is critical: 1) an enterprise with competitive products in a growing market; 2) an enterprise with competitive products in an unstable market.

A conservative position is most often characteristic of a stable industry. Such enterprises have a certain financial potential, however, the competitive characteristics of the products are critical. The main tasks of such enterprises should be the search for new markets, preservation of product advantages, development of new types of products, reduction of non-productive costs and activation of money circulation: 1) an enterprise with competitive products in a stable market; 2) an enterprise with products that temporarily have no competitors.

The defensive stance is typical of economically unattractive activities in which competitive advantages do not create economic ones, or the lack of competition is due to the outflow of capital to economically more profitable industries. Almost all factors are critical, with the exception of the competitive position of the product. The enterprise can continue the tactics of “experiencing” an unfavorable period (which, as a rule, does not bring success) or reorient to other activities, reduce production capacity, restructure production and financial resources, limit investments: 1) an enterprise with low product competitiveness, negative growth in a stable industry; 2) an enterprise with a good financial position in an unstable and ineffective industry.

2. SPACE method

Analysis of the strategic position and assessment of the company's actions

The strategist must be able to assess the most advantageous strategic position of the company, the attractiveness of the sphere of its business, the ability to compete in the markets. The business of an organization is a key mechanism for ensuring the interests of the subjects of this organization. Therefore, evaluating a business as unattractive can lead to a change in interests. Choosing mechanisms to ensure interests and counter threats, it is also necessary to correlate them with the position of the organization.

The main method of such assessments is the Strategic Positioning and Assessment Matrix (SPACE).

The SPACE method is that four groups of factors are assessed for the enterprise. Each factor is assessed by experts on a scale from 0 to 6.

Environmental stability factors (ES)

Technological changes
Inflation rate
Demand volatility
Competitive product price range
Barriers to market access
Competitive pressure
Price elasticity of demand	inflexible

Industrial capacity factors (IS)

Growth potential
Profit potential
Financial stability
Technology level
Resource utilization	ineffective	effective
Capital intensity
Ease of market access
Productivity, utilization of production facilities

Competitive Advantage Factors (CA)

Market share		small
Product quality
Product life cycle	elementary	finite
Product replacement cycle	fixed	replaceable
Customer loyalty
Capacity utilization by competitors
Vertical integration

Financial capacity factors (FS)

Return on investment
Financial dependence	unbalanced	balanced
Liquidity	unbalanced	balanced
Required / available capital
Flow of funds
Ease of leaving the market
Enterprise risk

Having estimated the value of each factor, it is necessary to calculate the average value of the factors within each of the groups, and then postpone the obtained values \u200b\u200bon the coordinate axes shown in Fig. 1.

Figure: 1. Matrix of strategic position and assessment of actions

The result will be a quadrangle of one of the types shown in Fig. 2.

Figure: 2. Graphical representation of various strategic states

strategic matrix company competitive

If the side in the FS - IS quadrant is the farthest from the center of coordinates, then the company is in an aggressive strategic state. If the side in the IS - ES quadrant is farthest away, then the company is in a competitive strategic position. If the side in the CA - FS quadrant is farthest away, then the company is in a conservative strategic state. If the side in the CA - ES quadrant is farthest away, then the company is in a defensive strategic state.

Depending on the strategic state, the most appropriate are the following groups of strategy mechanisms:

Aggressive	This is typical of an attractive industry with little ambiguity. The company gains competitive advantages, which it can maintain and increase with the help of financial potential. Threats are insignificant, it is necessary to concentrate on securing interests. The mechanisms are aimed at: · Expansion of production and sales; · Price war with competitors; · Development of new market sectors; · Promotion of brands.
Competitive	This condition is characteristic of an attractive industry. The organization gains a competitive advantage in a relatively volatile environment. Financial capacity is a critical factor. It is necessary to fend off threats related to the loss of funding. Basic mechanisms: · Search for financial resources; · Development of sales networks.
Conservative	This condition is usually seen in stable markets with low growth rates. In this case, efforts are focused on financial stabilization. The most important factor is the competitiveness of the product. Basic mechanisms: · Reducing the cost while improving the quality of the goods; · Reducing production and entering more promising markets.
Defensive	This condition occurs when an organization operates in an attractive industry, but lacks the competitiveness of products and financial resources. The key strategy is: · Special attention mechanisms to counter threats; · Leaving the market.

Posted on Allbest.ru