Quantitative Strategic Planning Matrix (QSPM)

What is a Quantitative Strategic Planning Matrix or a QSPM?

a

high-level strategic management approach for evaluating possible strategies. provides an analytical method for comparing feasible alternative actions. this approach attempts to objectively select the best strategy using input from other management techniques and some easy computations.

Why QSPM called stage 3 of the strategy formulation analytical framework?

Because

uses inputs from stage 1 analyses, matches them with results from stage 2 analyses, and then decides objectively among alternative strategies.

Six steps to developing a QSPM

1. Make a list of the firms key external opportunities /threats and internal strengths/weaknesses in the left column of the QSPM. 2. Assign weights to each key external and internal factor. - Identical to IFE and EFE matrix 3. Examine the Stage 2 matrices and identify alternative strategies that the organization should consider implementing.

4. Determine the attractiveness Scores indicate how each factor is important or attractive determined by examining each key externaland internal factor separately

Does this factor make a difference in our decision about which strategy to pursue

attractive shows the strength , improvement and opportunity

no shows the key factor has no effect on the specific choice

5. Compute the total attractiveness score(TAS) Multiplying the weights by the attractiveness scores Indicates the relative attractiveness of each alternative strategy Consider only the internal and external success factor The higher the Total Attractiveness score , the more attractive the strategic

6. Compute the Sum Total Attractiveness Score Indicates which strategy is most attractive among the alternatives Magnitude of difference the alternatives desirability one strategy over another High score indicates more

Positive Features of QSPM

1) Sets

of strategies can be examined simultaneously. 2) No limit to the number of strategies that be evaluated. 3) Require strategists to integrate related internal and external factors into

Advantages of QSPM
provides

a framework to prioritize the strategies used for comparing strategies at any level such as corporate, business and functional. integrate external and internal factors into decision making process. can be developed for small and large scale profit and non-profit

Limitations of QSPM
1) Always

require intuitive judgments and educated assumptions. 2) The ratings and attractiveness score require judgmental decisions, even though they should be based on