Quantitative Strategic Planning Matrix (QSPM)

 Constitute the Decision Stage, which is the 3rd stage of Strategic Formulation analytical
Framework.
 It is a tool that uses the “inputs” derived from the Stage 1 analyses, the IFE and EFE matrix, and
‘matched” these from the results derived in the Stage 2 analyses, the feasible alternative
strategies derived from the SWOT, SPACE, BCG, IE and Grad Strategy Matrixes.
 Its main objective is to be able to decide which among those alternative strategies are the best.
6 components of QSPM
A. Key Factor
 This is situated in the left column of the QSPM.
 This information should be taken directly from the EFE Matrix and IFE Matrix. A minimum
of 10 external key success factors and 10 internal key success factors should be included
in the QSPM.
B. Weights
 These weights are identical to those in the EFE Matrix and the IFE Matrix.
 The weights are presented in a straight column just to the right of the external and
internal critical success factors.
C. Strategic Alternative
 These are the alternatives that we were able to derive during our “matching stage”.
 This usually have a maximum of 3 strategies and requires our judgment in selecting which
strategies the organization should consider implementing.
 Record these strategies in the top row of the QSPM.
D. Alternative Score (AS)
 These are numerical value that indicate the relative attractiveness of each strategy in a
given set of alternatives. Attractive means the strategy enables firm to Capitalize
Strength, improve weaknesses, exploit opportunities and avoid threats.
 We can determine AS by answering the question: “Does this factor affects the choice of
strategies being made?”
IF YES, range each key factor as follows; 1=not attractive, 2=somewhat
attractive, 3=reasonably attractive and 4=highly attractive.
IF NO, use a dash (-) to indicate that the key factor is not affected.
(NOTE: if one Strategic alternative has assigned an Attractiveness Score, the other Strategic Alternative
must also be assigned. The same treatment should be made when we put a dash (-))
E. Total Alternative Score (TAS)
This is the product of the Weight and Attractiveness Score in each row. Wherein, the
higher the Total Attractiveness Score we obtain, the more attractive the Strategic Alternative.
F. Sum total Alternative Score (STAS)
This reveal which strategy is the most attractive and it constitute the total sum of all the
Total Attractiveness score of each Strategic Alternative. The higher the STAS, the more the
attractive the strategy, and the difference between the STAS of each set of alternative strategy
indicates the relative desirability of one strategy over the other.
Positive Features of QSPM
 The sets of strategies can be examined sequentially or simultaneously.
 It requires strategists to integrate pertinent external and internal factors into the decision
process.
 It focuses more on the important relationships that affect strategy decisions.
 It can be applied to any type of organization, it can be either small and large for-profit and
nonprofit organizations.
Limitations of QSPM
 It always requires intuitive judgments and educated assumptions.
 It can be only as good as the prerequisite information and matching analyses upon which it is
based.
Cultural Aspect of Strategic Choice
Culture include the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes,
heroines that describe a firm. It is the unique way an organization does business.
Significance of culture to Strategic Management
 If a firm’s strategies are supported by cultural products such as values, beliefs, rites, rituals,
ceremonies, stories, symbols, language, heroes, and heroines, then managers often can
implement changes swiftly and easily.
 if a supportive culture does not exist and is not cultivated, then strategy changes may be
ineffective or even counterproductive.
 Culture provides an explanation for the difficulties a firm encounter when it attempts to shift its
strategic direction.
 “Not only has the “right” corporate culture become the essence and foundation of corporate
excellence, but success or failure of needed corporate reforms hinges on management’s sagacity
and ability to change the firm’s driving culture in time and in tune with required changes in
strategies.”