OPTIMIZING THE FIRM’S STRATEGIC DECISIONS BY USING THE OSPP COMPUTER MATRIX PROGRAM EMPIRICAL EVIDENCE

Over the last thirty years researchers have developed analytical tools that systematically attempt to establish a firm’s future competitive position and future potential of the industry in which it competes. Many of these analysis tools utilized positioning matrices to depict the firm’s relative position based on two variables such as market share or growth rate. As researchers began to understand the importance of internal and external factors, the analysis tools were enhanced to enable management’s deeper interpretation of the firm’s position. H. Igor Ansoff further contributed to academia and industry with his Strategic Success Paradigm and subsequently his Ansplan-A computer program. All of these assessments are invaluable strategic tools for firms. However, it could be argued that these positional analyses fall short as each only analyze the firm from a singular perspective and none of the matrices considers the interactions of the other.

This research paper is an extension of an earlier conceptual paper published in 2012 and provides empirical evidence of a computer program that combines the previous disjointed matrices and provides management with several critical views of the firm’s strategic position such as its future competitive position, the industry’s future prospects, and its strategic posture.

Extending the conceptual application to empirical research was requisite to determine the efficacy of the computer program. Using SPSS analytics, our study analyzed 61 publicly traded firms in various industries including retail, technology, manufacturing and the service sector to determine if a relationship exists between the firm’s center of gravity (COG) matrix position as indicated by the computer program and key performance determinants as indicated by the following financial ratios; current ratio, GPM, NPM, ROE, ROA, ROCI, EBITA, revenue growth, P/E, EPS, and D2E.

Research findings indicate that there is a strong relationship between the firm’s COG position and multiple key performance indicators thus providing support for the efficacy of this computer model as a reliable strategic planning tool for management in providing critical high-level data for optimal strategic formulation and implementation.