SPACE MATRIX

The Strategic Position and Action Evaluation (SPACE) Matrix is one of the strategic
management tool for analyzing the company and its environment to formulating the strategies. It
is four-quadrant structure which specify whether aggressive, defensive competitive or
conservative strategies are most suitable for a given organization, company or business.
The Strategic Position and Action Evaluation Matrix Analysis are most frequently in use during
professional industry or market analysis of a company. The SPACE Matrix axis signify the 2
external proportions which are industry strength (IS) environmental stability (ES) and two
internal dimensions of a competitive company which are competitive advantage (CA) and
financial strength (FS). These 4 dimensions are the most significant determinants of a company's
overall strategic position in the industry or marketplace.

INTERNAL STRATEGIC POSITION EXTERNAL STRATEGIC POSITION

Financial Strength (FS): Environmental Stability (ES):

Other charges (cheque books etc) 2 Inflation rate -
Equity 4 Technology changes
Leverage 3 Demand variability
Cash flow 5 Price range of competitors
14/4
= 3.5
Competitive Advantage (CA): Industry Strength(IS):
Service quality Growth potential
Loyalty Financial stability
Market share Technology (know how)
Brand image Consolidation

Following are the possible strategies for ABC Bank:

• Market development
• Market penetration
• Product development
• Horizontal integration
Market development
A market development strategy is a product-market strategy whereby an organization introduces
its offerings to markets other than those it is currently serving. In global marketing, this strategy
can be implemented through exportation licensing, joint ventures, or direct investment. ABC
bank will develop new market in rural areas.

Market penetration
This strategy aims at attracting new customers from the market that the firm isalready in. It is
undoubtedly the most popular strategy among financial services. The ABC bank is pursuing a
market penetration strategy, becoming fast growing society. It is achieving this by redirecting its
resources away from branch openings towards advertising and selling. In order to expand
consumer awareness, marketing objective is being set to change certain image perceptions
through advertising on television.

Product development
The objective of product development is to cultivate, maintain and increase a company's market
share by satisfying a consumer demand. ABC bank is launching premier cards i.e visa and
discount & privileges. Moreover our bank is launching Auto loan policy where affordable
markup rates will apply to chose a car that is new, used or imported.

Horizontal integration
It is the process of a company increasing production of goods or services at the same part of the
supply chain. A company may do this via internal expansion, acquisition or merger. Many
people in Pakistan avoid banking systems due to Islamic point of views and seeking Shariah
compliant banking products and provide services ABC bank is planning to merge with Islamic
banking system to provide product and services according to Shariah in Islamic countries.

TOWS MATRIX
The TOWS Matrix is derived from the SWOT Analysis model, which stands for the internal
Strengths and Weaknesses of an organisation and the external Opportunities and Threats that the
business is confronted with. The TOWS Matrix is aimed at developing strategic options from an
external-internal analysis and is a practical tool, particularly in the fields of business
administration and marketing.
It starts by analysing external opportunities and threats. Up next are the internal strengths and
weaknesses, which will subsequently be linked to the external analysis. And this is where it goes
a step beyond the traditional SWOT analysis; strategic tactics emerge by opposing S-O
(Strengths-Opportunities), W-O (Weaknesses-Opportunities), S-T (Strengths-Threats) and W-T
(Weaknesses-Threats).
A next step in the analysis helps when thinking about the option they want to pursue. Here the
external opportunities and threats are compared to the internal strengths and weaknesses to help
identify strategic options:
 Internal Strengths and External Opportunities (S-O) – how can they use the strengths to
benefit from existing external opportunities?
 Internal Strengths and External Threats (S-T) – how can they benefit from their strengths
to avoid or lessen (potential) external threats?
 Internal Weaknesses and External Opportunities (W-O) – how can they use opportunities
to overcome the organisation’s internal weaknesses?
 Internal Weaknesses and External Threats (W-T) – how can they minimise weaknesses
and thus avoid potential threats?
Here is a TOWS matrix of ABC bank:

STRENGHT WEAKNESSES:
INTERNAL financial position. Less market share
Professional workforce self marketing department.
FACTORS Low cost Slow in launching product.
number of branches Low salary packages
new Product Lines No customer feedback
EXERNAL
Job security Employee retention
FACTORS Modernization banking system
OPPORTUNITIES: S.0 W.O
Information technology S1, O4: Diversification W5,O2: new management
ERP & CRM technique involvement
Investment opportunities
Foreign branches
S7,O1 & O6: Artificial
Increasing scope enterprises. intellegence W6,O4: new hirings
Mobile and online banking
Merging or aquisition

THREATS S.T W.T

Competition in banking sector S1,T3: stay progressive W5,T4: Employee
Economic conditions retention
High inflation
Instable government policies
S3,T6: maintain customer W3,T1: rising intense
competitive pricing strategies retention competition
Entry of foreign banks W1,T7: lack of
shareholders confidence