The Strategic Position and Action Evaluation (SPACE) Matrix

The SPACE matrix is a Iour quadrant Iramework which indicates whether aggressive,
conservative, deIensive, or comparative strategies are most appropriate Ior a given organization.
Table below shows the SPACE matrix Ior Nestle Company. The quadrant is can be divided into
two categories which is internal and external strategy position. The Internal strategic position
describes both Iinancial position and competitive position oI the Nestle Company. The external
strategy position describes both the stability position and the industry position Ior the company.

The rank or rating given in the SPACE matrix are based on how worst and best the
situation or events toward the company. For the Iinancial position (FP) and industry position
(IP), the rate are given with the positive values ranging Irom 1 which is worst and to 7 which
is best to the Nestle company. Meanwhile, Ior the stability position (SP) and competitive position
(CP), the negative values ranging Irom -1 Ior best and -7 Ior worst to the Nestle company. The
values given are based on how the event Iavorable or negatively impact the company.

From the rating given, then the average scores Ior the FP, IP, SP and CP will be
calculated and the value Ior each position will be plotted to the Space Matrix. Later the two
scores Irom x-axis and y-axis will be sum and the intersection Ior oI the new xy point will be
Iound. This new xy intersection or vector will reveal the strategies recommended Ior the Nestle
Company.







inancial Position (P) Rating
Nestle achieve high level oI organic growth and improving the EBIT margin
Nestle net Iinancial debt Iell Irom CHF 18.1 billion to CHF to 3.9 billion.
Return on invested capital excluding goodwill oI 36.1.
Nestle brands have annual sales CHF 1 billion global region and global
Nestle ranks higher in The World Global 2000 than its competitor Ior sales, proIit, assets,
and market values

5.0
4.0
6.0
5.0
7.0

27
Industry Position (IP) Rating
Britain coIIee demand increase and tea decrease
Danone dairy market Iace diIIiculties in Russia and experience loss oI U.S market share
UnileverHoodia R&D Iace Iailure estimate oI $25 million
Floods in Bangkok eIIect Unilever
Comprehensive policy initiatives toward soIt drinks
CoIIee consumption in Brazil overtake U.S in Iew years
Raw material Ior chocolate prices to remain high and volatile
6.0
5.0
3.0
3.0
5.0
6.0
2.0
30
Stability Position (SP) Rating
Unilever raised its prices sharply in the second quarter to oIIset higher commodity costs
Unilever to invest in Sei Mengke Industrail Zone
Soda or soIt drink advertising expanded online
KraIt is looking to penetrate $1 billion to rollout MiO line
New Zealand to Iight against Iree trade deals
Switzerland's chocolate maker Lindt & Spruengli upbeat Ior Christmas market share
Unilever targets emerging markets Ior 75 percent oI sales.
Starbuck Corp to enter Juice market
PepsiCo work with Tingyi Holdings Corp to extend its distribution deeper into China

- 2.0
- 6.0
- 4.0
- 5.0
- 4.0
- 4.0
- 6.0
- 4.0
- 5.0
- 40
Competitive Position (CP) Rating
Nestle has big pool oI loyal customers Ior the Iood and nutrition market
Nestle have about 65 market share in top 20 market
Nestle R&D capabilities in coIIee leadership system with 30 oI the market share
Nestle become a global leader in branded hot beverage solutions
SaIety indicator improved by 18 to 4.2 recordable injuries per million hours worked
Nestle Vision contradict with their unhealthy product such as Maggi instant noodles
Failure to act on child labour and slavery in its cocoa supply chain
Aggressive marketing oI baby milks and Ioods and undermining oI breastIeeding
Exploitation oI Iarmers, particularly in the dairy and coIIee sectors
Environmental degradation, particularly oI water resources

- 2.0
- 1.0
- 2.0
- 2.0
- 3.0
- 6.0
- 4.0
- 5.0
- 4.0
- 5.0
- 34
The average score Ior each position
Position Calculation
(1) Financial position 27/5 5.4
(2) Industry position 30/7 4.29
(3) Stability position - 40/9 - 4.44
(4) Competitive position - 34/10 - 3.4

Directional vector coordinates:
X-axis CP IP - 3.4 (4.29) 0.89
Y-axis SP FP -4.44 (5.4) 0.96










From the SPACE matrix we can concluded that the company had achieved a competitive
advantage in a growing and stable industry and the strategies that suit Ior the company to pursue
is the aggressive strategy.

CP
FP
IP
SP
(0.89, 0.96)