What is the first step in developing a QSPM?

The initial step in developing a Quantitative Strategic Planning Matrix (QSPM) is to list the key external opportunities and threats. This is essential because the QSPM framework is designed to evaluate and prioritize a company's strategic options based on external factors that can impact its success. By identifying these opportunities and threats, organizations can create a clear understanding of the environment in which they operate. This foundational step ensures that the subsequent analysis is grounded in the realities of the market and competitive landscape.

Listing the key external factors provides a basis for further analysis, such as assessing their attractiveness and assigning weights to their importance. Once the external factors are understood, a company can then determine the attractiveness scores and compute total attractiveness scores based on the strategic alternatives available. However, without this initial identification of relevant external conditions, the entire QSPM process would lack the necessary context to make informed strategic decisions.