Saturday 8 December 2018

Quantitative Strategic Planning Matrix

Quantitative Strategic Planning Matrix

The Quantitative Strategic Planning Matrix is a strategic tool which is used to evaluate alternative set of strategies. The QSPM incorporate earlier stage details in an organize way to calculate the score of multiple strategies in order to find the best match strategy for the organization.

In the business world, the strategy is a pattern of the selected primary action to realize the vision of the Organization through the mission. While the operating strategy is a pattern of decision-making consistent operation and is a competitive advantage for the company. This study aims to determine which strategies will be carried out in the framework of company development by analyzing the external and internal factors that affect the operation, then make a matrix-matrix analysis and formulating the strategy of operation that will run the company.

The formulation of strategy

The analysis tool is QSPM used to decide on the strategy to be used on the basis of the attractiveness alternative-alternative strategies. Calculation of the QSPM is based on input from the internal matrix of weights external, and alternative strategy in the matching.

The formulation of the strategy of the operation by using an approach to Quantitative Strategic Planning Matrix (QSPM) is done through the application of decision-making method of Analytical Hierarchy Process (AHP) to experts within the company. The formulation of the strategy includes:

Initial analysis

IE internal data analysis external data and company. The purpose of the external analysis (external audit) is to make a list of threats and the opportunities that will be faced by the company. External environment analysis includes: the field of economic, social, demographic, cultural and natural environment, politics, Government, and law, technology and competitive field. The purpose of internal analysis (internal audit) is to make a list of strengths and weaknesses of the internal key companies. This internal Analysis include; processes, capacity, preparation, quality and labor.

The Input Phase, which includes:

  • The making of The Internal Factor Evaluation (IFE) Matrix, i.e., a summary of the audit of the management of internal strategic. This strategy formulation tool summarizes and evaluates the strength-the strength and weaknesses.

  • The making of External Evaluation Matrix (EFE) Matrix, i.e. a summary of the audit of the management of external strategic. This strategy formulation tool summarizing and evaluating the opportunities and threats.

Stages of adjustment.

Namely Information obtained from the third matrix on stage input previously used as an information basic input at this stage of adjustment. The steps in the phase adjustment is:

  • The making of Strengths-Industry-Opportunities- Threats (SWOT) Matrix, is one of the tools important to help managers develop four types of strategy: the strategy SO, WO Strategies, strategy ST, and WT Strategies.

  • The making of Internal-External (IE) Matrix, the positioning of various dimensions of the Organization in nine cells, where each cell is having the strategies each.

Stages of The Decision.

IE techniques analysis of the quantitative approach i.e. Quantitative Strategic Planning Matrix (QSPM). This technique objectively indicates alternative the best strategy.

The research results show the n ilia for matrix IFE is 2.79 meaning operating companies have the capability of averaging the mediating terms of internal. While the value of the matrix of EFE was 2.47. Which means also operating company has an average ability in the face of environmental. Thus, the position of company operations located on the matrix V of IE, with product development strategy.

QSPM matrix, From the select strategy is looking for new sources of raw materials and raw material usage efficiency. To press the price of the total value of attractiveness 5,340. Therefore, d natural face competition, the company can produce and develop product pipeline ductile. That is able to meet the expect with certain specifications utilize a variety of competitive advantage on the company's internal focus. To keystroke production costs through the use of new raw materials. That comes from a new source of raw materials provide a higher level of efficiency. So that in the end was able to win the competition.

The concept – Quantitative Strategic Planning Matrix

Conceptually, QSPM determine the relative attractiveness of various strategies. It may  base on how far the key success factors both internal and external are exploit or fix. The relative attractiveness of each strategy in a set of alternatives was calculate by determining the cumulative influence of each factor for the success of key external and internal. The number of sets of alternative strategies. That are include in the QSPM can any number of strategies in a set can also be how alone. But only in the same set of strategies can be evaluated with each other.

For example, a set of concentric diversification strategy can include, horizontally, and conglomerates. While the other set can include the issuance of stocks and sales divisions to produce the needs capital. Two sets of this strategy is very different, and evaluates strategies QSPM in just one set.

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