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202 PART 2 • STRATEGY FORMULATION

9. On the Competitive Position (CP) axis of a SPACE Matrix, what level of capacity utilization
would be necessary for you to give the firm a negative 1? Negative 7? Why?
10. If a firm has weak financial position and competes in an unstable industry, in which quadrant
will the SPACE vector lie?
11. Describe a situation where the SPACE analysis would have no vector. In other words,
describe a situation where the SPACE analysis coordinate would be (0,0). What should an
analyst do in this situation?
12. Develop a BCG Matrix for your university. Because your college does not generate profits,
what would be a good surrogate for the pie slice values? How many circles do you have and
how large are they? Explain.
13. In a BCG Matrix, would the Question Mark quadrant or the Cash Cow quadrant be more
desirable? Explain.
14. Would a BCG Matrix and analysis be worth performing if you do not know the profits of
each segment? Why?
15. What major limitations of the BCG Matrix does the IE Matrix overcome?
16. In an IE Matrix, do you believe it is more advantageous for a division to be located in quad-
rant II or IV? Why?
17. Develop a 2 × 2 × 2 QSPM for an organization of your choice (i.e., two strengths, two weak-
nesses, two opportunities, two threats, and two strategies). Follow all the QSPM guidelines
presented in the chapter.
18. Give an example of “equifinality” as defined in the chapter.
19. Do you believe the reasons to disclose by-segment financial information offset the reasons
not to disclose by-segment financial information? Explain why or why not.
20. How would application of the strategy-formulation framework differ from a small to a large
organization?
21. What types of strategies would you recommend for an organization that achieves total
weighted scores of 3.6 on the IFE and 1.2 on the EFE Matrix?
22. Given the following information, develop a SPACE Matrix for the XYZ Corporation:
FP = +2; SP = -6; CP = -2; IP = +4.
23. Given the information in the following table, develop a BCG Matrix and an IE Matrix:

Divisions 1 2 3
Profits $10 $15 $25
Sales $100 $50 $100
Relative Market Share 0.2 0.5 0.8
Industry Growth Rate +.20 +.10 -.10
IFE Total Weighted Scores 1.6 3.1 2.2
EFE Total Weighted Scores 2.5 1.8 3.3
24. Explain the steps involved in developing a QSPM.
25. How would you develop a set of objectives for your school or business?
26. What do you think is the appropriate role of a board of directors in strategic management? Why?
27. Discuss the limitations of various strategy-formulation analytical techniques.
28. Explain why cultural factors should be an important consideration in analyzing and choosing
among alternative strategies.
29. How are the SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and Grand Strategy
Matrix similar? How are they different?
30. How would for-profit and nonprofit organizations differ in their applications of the strategy-
formulation framework?
31. Develop a SPACE Matrix for a company that is weak financially and is a weak competitor.
The industry for this company is pretty stable, but the industry’s projected growth in revenues
and profits is not good. Label all axes and quadrants.
32. List four limitations of a BCG Matrix.
33. Make up an example to show clearly and completely that you can develop an IE Matrix for
a three-division company, where each division has $10, $20, and $40 in revenues and $2, $4,
and $1 in profits. State other assumptions needed. Label axes and quadrants.
34. What procedures could be necessary if the SPACE vector falls right on the axis between the
Competitive and Defensive quadrants?
35. In a BCG Matrix or the Grand Strategy Matrix, what would you consider to be a rapid
market (or industry) growth rate?
36. What are the pros and cons of a company (and country) participating in a Sustainability Report?
37. How does the Sarbanes-Oxley Act of 2002 impact boards of directors?