MGT603 Assignment No. 2 solution
Wednesday, January 12, 2011 Posted In MGT Edit ThisStrategic Management (MGT603)
Assignment No. 2 Marks: 20
Global Aim Limited (GAL) is the pioneer manufacturer of electrical goods in Pakistan. Mr. Mohsin, CEO of the company has always been contributing towards the advancement and development of the engineering sector in Pakistan by introducing a range of quality electrical equipments and home appliances. He has also produced hundreds of engineers, skilled workers and technicians through its apprenticeship schemes and training programmes. His vision is to produce best quality of products on affordable prices that’s why the company is having high market growth and good competitive position in the market. But still he wants to know the current strategic position of his company whether aggressive, conservative, defensive or competitive strategies are most appropriate for his company. He has called a meeting with all senior strategic managers to talk on this issue and suggested to develop a SPACE Matrix. They have included the following factors identified earlier in EFE and IFE Matrices which should be considered in developing the SPACE Matrix.
FINANCIAL STRENGTH
ROA = 4
Profitability = 3
Debt-Equity Ratio = 4
Liquidity = 2
Total= 13/4 = 3.25
INDUSTRY STRENGTH
Ease of entrance = 2
Cost of new entrance = 4
Saturation level = 5
Market conditions = 4
Total = 15/4 = 3.75
COMPETITIVE ADVANTAGE
Innovation = -1
Strong culture = -2
Global reach = -4
Leadership = -2
Total= -9/4 = 2.25
ENVIRONMENTAL STABILITY
Political stability = -2
Infrastructure available = -1
Incentives provided = -3
Govt. Regulations = -2
Total = -8/4 = 2
SPACE Matrix
FS
+6
+1
+5
+4
+3
+2
-6
-5
-4
-3
-2
-6 -5 -4 -3 -2 -1 -1 +1 +2 +3 +4 +5 +6
ES
CA IS
Conservative Aggressive
Defensive Competitive
3.25
-2.25
-2.00
3.75
REQUIRED:
Being a strategic Manager of Global Aim Limited you are required to:
A. Draw a directional vector from the origin of the SPACE Matrix through the new insertion point and identify which one is the most important determinant (aggressive, conservative, defensive or competitive) of GAL’s overall strategic position? (10 Marks)
B. Suggest most appropriate strategies to the company according to the selected quadrant. (10 Marks)
NOTE: You are encourage to use the SPACE Matrix Template in word file provided in VULMS download section to draw a directional vector in the appropriate quadrant or you can also develop SPACE Matrix by yourself.
Schedule
Opening Date and Time January 12 , 2011 At 12:01 A.M. (Mid-Night)
Due Date and Time January 17 , 2011 At 11:59 P.M. (Mid-Night)
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