Your SlideShare is downloading. ×
0
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Qspm matrix
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Qspm matrix

13,788

Published on

Published in: Business
1 Comment
6 Likes
Statistics
Notes
No Downloads
Views
Total Views
13,788
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
586
Comments
1
Likes
6
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Choosing best strategy QSPM
  • 2. Strategy• All nine techniques in strategy formulation required analysis as well as intuition in assigning weights• This gives a shift of word oriented to number oriented planning which is rational to a great extend• But even in these methods personal bias, emotions, personalities and Halo error play a dominant role
  • 3. Comprehensive Strategy-Formulation Framework
  • 4. Introduction• Quantitative Strategic Planning Matrix (QSPM) is a high-level strategic management approach for evaluating possible strategies• QSPM provides an analytical method for comparing feasible alternative actions• The QSPM method falls within so-called stage 3 of the strategy formulation analytical framework.
  • 5. Why go for QSPM?• QSPM approach attempts to objectively select the best strategy using input from other management techniques and some easy computations• The QSPM method uses inputs from stage 1 analyses, matches them with results from stage 2 analyses, and then decides objectively among alternative strategies
  • 6. Steps to form a QSPM1. The overall strategic managementanalysis is used to identify key strategicfactors. This can be doneusing the EFE & IFE matrix.2. Formulation of the type of the strategywe would like to pursue. This can be doneusing the SWOT analysis,SPACE matrix analysis, BCG matrix model, orthe IE matrix model.
  • 7. Steps to form a QSPM (Cont.)3. Each key external and internal factorshould have some weight in the overallscheme. These weights from the IFE andEFE matrices.4. Attractiveness Scores (AS) how eachfactor is important or attractive to eachalternative strategy. Attractiveness Scoresare determined by examining each keyexternal and internal factorseparately(0,1,2,3,4)
  • 8. Steps to form a QSPM (Cont.)5. Total Attractiveness Scores are definedas the product of multiplying the weights(step 3) by the Attractiveness Scores (step4) in each row.6. Calculate the Sum Total AttractivenessScore by adding all Total AttractivenessScores in each strategy column of theQSPM.
  • 9. Illustration: QSPM for Retail Computer Store • Internal audit and IFE MatrixStep 1 • External audit and EFE Matrix • Formulation of alternative Step 2 strategies using SWOT • QSPM Matrix formulation Step 3 • Recommendations
  • 10. IFE matrix for Retail Computer Store Stage 1 Key Internal Factors Strengths Weight Rating W*score1Inventory turnover increased from 5.8 to 6.7 this year 0.05 3 0.15 Average customer purchasse increased from $97 to2 $128 this year 0.07 4 0.283Employee Morale is excellent 0.1 3 0.3 In-store promotions resulted in 20% increase in sales4 this year 0.05 3 0.15 Newspaper Advertising expenditure increased 10%5 this year 0.02 3 0.06 Revenues from repair/service segment of store up6 16% this year 0.15 3 0.45 In store Technical Support Personnel have MIS college7 degrees 0.05 4 0.2 Store debt-total assets ratio declined to 34% this year8 from 51% 0.03 3 0.099Revenues from employee up 19% in last two years 0.02 3 0.06
  • 11. IFE matrix for Retail Computer Store Stage 1 Weakness Weight Rating W*score Revenues from Software segment of10 storedown 12% this year 0.1 2 0.2 Location of store negatively impacted by new11 Highway34 to be completed in 1 year 0.15 2 0.312Carpet and Paint in store somwhat in despair 0.02 1 0.0213Bathroom in store needs Refurbishing 0.02 1 0.0214Revenues from Business down 8% this year 0.04 1 0.0415Store has no website 0.05 2 0.1 Supplier on time delivery increased to 2.4 days16 in last two quarters 0.03 1 0.03 Oftentimes customers have to wait 5min to17 check out 0.05 1 0.05 Total 1 2.5
  • 12. EFE matrix for Retail Computer Store Stage 1 Key External Factors Opportunities Weight Rating Wscore1Population of city growing 10% annually 0.15 4 0.62Rival computer store openeing 1 mile away 0.05 2 0.1 Vehicle traffic passing store up 12% in last3 year 0.1 1 0.14Vendors average 6 new products per year 0.05 3 0.155Senior citizen use of computer 8% this year 0.05 4 0.2 Small Business growth in area up 10% this6 year 0.05 2 0.1 Desires for websites up 18% by realtors7 yearly 0.1 3 0.38Desires for websites up 12% by small firms 0.05 1 0.05
  • 13. EFE matrix for Retail Computer Store Stage 1 Threats Weight Rating Wscore 9Best Buy opening a new store Nearby 0.1 4 0.410Local universities offer Computer Repair 0.05 3 0.1511New bypass highway in 1 year will divert traffic 0.05 3 0.1512New Mall being builtnearby in 1 year 0.1 1 0.113Gas prices up by 14% in pat year 0.05 4 0.214Vendors raising prices 8% Quarterly 0.05 2 0.1 Total 1 2.7
  • 14. SWOT Stage 2 S W1. Inventory turnover up 1. Software revenues in 5.8 to 6.7 store down by 16%2. Average customer 2. Location of store hurt purchase up $97 to by new Highway $128 3. Carpet & paint in store3. Employee morale is in disrepair excellent 4. Bathroom in store4. In store promo-20% needs refurbishing increase in sales 5. Total store revenues5. Newspaper ads down by 8% expense down by 10% 6. Store has no website6. Revenues from repair up by 16%
  • 15. SWOT (Cont) Stage 2 O T1. Population of city 1. Best buy opening growing at 10% store in 1 year2. Vehicle traffic passing 2. Local university offers store up 12% computer repair3. Senior citizens use of 3. New bypass highway products up by 8% will divert traffic in one4. Small business grow in year area up 10% 4. New mall being built5. Desire for websites up near 18% by realtors 5. Gas prices up by 14%6. Desire for websites up 6. Vendor raising price 12% by small firms by 8%
  • 16. Strategy based on SWOTA) Purchase land to build new larger storeB) Fully renovate the existing store
  • 17. QSPM Final Stage Strategic Alternatives 1 2 BUY NEW LAND FULLY and BUILD RENOVATE LARGER STORE EXISTING STOREOpportunities Weight AS TAS AS TASPopulation of city growing 10% 0.15 4 0.6 2 0.3Rival computer store opening 1 mile 0.05 2 0.1 4 0.2Vehicle traffic passing store up 12% 0.1 1 0.1 4 0.4Vendors average six new products year 0.05 - -Senior citizen use of computers up 8% 0.05 - -Small business growth in area up 10% 0.05 - -Desire for web sites up 18% by realtors 0.1 - -Desire for web sites up 12% by small firms 0.05 - -ThreatsBest Buy opening new store in 1yr near 0.1 4 0.4 3 0.3Local university offers computer repair 0.05 - -New bypass Hwy 34 in 1 yr will divert traffic 0.05 4 0.2 1 0.1New mall being built near 0.1 2 0.2 4 0.4Gas prices up 14% 0.05 - -Vendors raising prices 8% 0.05 - - 1
  • 18. QSPM (Cont) Final StageStrengthsInventory turnover increased from 5.8 to 6.7 0.05 - -Average customer purchase increased from $97 to $128 0.07 2 0.14 4 0.28Employee morale is excellent 0.1 - -In-store promotions resulted in 20% increase in sales 0.05 - -Newspaper advertising expenditures increased 10% 0.02 - -Revenues from repair/service segment of store up 16% 0.15 4 0.6 3 0.45In-store technical support personnel have MIS collegedegrees 0.05 - -Store’s debt-to-total assets ratio declined to 34% 0.03 4 0.12 2 0.06Revenues per employee up 19 percent 0.02 - -WeaknessesRevenues from software segment of store down 12% 0.1 - -Location of store negatively impacted by new Highway 34 0.15 4 0.6 1 0.15Carpet and paint in store somewhat in disrepair 0.02 1 0.02 4 0.08Bathroom in store needs refurbishing 0.02 1 0.02 4 0.08Revenues from businesses down 8% 0.04 3 0.12 4 0.16Store has no web site 0.05 - -Supplier on-time-delivery increased to 2.4 days 0.03 - -Often times customers have to wait to check out 0.05 2 0.1 4 0.2Total 1 3.32 3.16
  • 19. Rules for QSPM• If a particular factor affects one strategy and not other then it affects the choice so the AS should be recorded for both strategies• Scores in a row is never duplicated• QSPM is always prepared row-wise• If there is more than one strategy in QSPM then AS scores can range from 1 to “no. of strategies being evaluated”
  • 20. Pros and Cons Pros Cons• Sets of strategies • Requires intuitive considered judgments and simultaneously or assumptions sequentially • Only as good as the• Integration of pertinent prerequisite inputs external and internal • Only strategies in a given factors in the decision- set are evaluated relative making process to each other
  • 21. ALL GOOD THINGS COME TO AN END

×