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• QSPM is a high-level StratMa approach for evaluating strategies, providing an analytical method for comparing feasible alternative actions
• The ultimate goal of the QSPM method is to pick the right strategy to move forward with based on the information available at hand
• Constructing a QSPM


  1. Consider following the steps below:

  2. 1-Internal Factors

  3. 2-External Factors

  4. 3-Strategy Alternatives

  5. 4-Weighting the Factors

  6. 5-Attractiveness Scores

  7. 6-Do the Math
• Steps to construct a QSPM


  • 1-Internal Factors
  • 2-External Factors
  • 3-Strategy Alternatives
  • 4-Weighting the Factors
  • 5-Attractiveness Scores
  • 6-Do the Math
• For constructing a QSPM, first develop a list of strengths and weaknesses from within the organization
• Strengths and weaknesses should be listed down the left side of a paper or spreadsheet
• Look outside the organization for opportunities and threats which exist in the market
• Opportunities and threats should be listed further down the left side of the paper or spreadsheet
• Outline strategies after identifying strengths, weaknesses, opportunities, and threats
• Assign weights to internal and external factors in the matrix to assign perceived importance
• Weights of internal and external factors should add up to 100%
• Assign attractiveness scores on a scale from 1 to 4 for each factor, where 1 is not attractive and 4 is highly attractive
• Factors should have both a weight and an attractiveness score in the matrix
• Final scores for all proposed strategy alternatives are calculated to finish the QSPM process
• The Wealth of Nations was written


  1776
• Rational


  (in classical economic theory) economic agents are able to consider the outcome of their choices and recognise the net benefits of each one
• Rational agents will select the choice which presents the highest benefits
• Producers act rationally by

  Selling goods/services in a way that maximises their profits
• Workers act rationally by


  Balancing welfare at work with consideration of both pay and benefits
• Governments act rationally by

  Placing the interests of the people they serve first in order to maximise their welfare
• Rationality in classical economic theory is a flawed assumption as people usually don't act rationally
• Marginal utility

  The additional utility (satisfaction) gained from the consumption of an additional product
• If you add up marginal utility for each unit you get total utility
• QSPM (Quantitative Strategic Planning Matrix) is a tool used to settle on final scores for alternatives by multiplying the weight by the attractiveness score and adding those scores up within each column
• The highest total score in a QSPM is seen as the best overall option
• Accurate weights and attractiveness scores are crucial for placing faith in the final outcome of the QSPM process
• Each step in the QSPM process should be taken seriously to base important decisions on the outcome of the analysis
• Acquiring a competing company was determined as the better option in the QSPM process, with a higher total attractiveness score compared to internal expansion