The SFA matrix is a framework that helps businesses evaluate strategic options. Gerry Johnson and Kevan Scholes created the SFA matrix to help businesses evaluate their strategic options before committing. Evaluation of strategic opportunities is performed by considering three criteria that make up the SFA acronym: suitability, feasibility, and acceptability.
Understanding the SFA matrix
With many strategic options to choose from, it can sometimes be hard for a business to determine which will produce the best outcome. Most choices have significant and far-reaching consequences for the business or the individual, so it’s important to choose wisely.
- Suitability – the most important factor in a strategic decision. Will the strategy achieve what the business wants it to achieve? Does the strategy address key opportunities and threats? Suitability encompasses a broad range of criteria such as environmental, market, and expectational suitability.
- Feasibility – can the business execute the strategy effectively? Can it be financed? Are the right skills or expertise in place? Can resources be obtained in adequate quantities? Is the structure of the organization a good fit for the strategic plan? Are there moral, ethical, or legal concerns?
- Acceptability – does the proposed strategy meet stakeholder expectations? In other words, is the level of financial or reputational risk acceptable? Do potential project outcomes justify the expense?
Evaluating strategic opportunities using the SFA matrix
Evaluating opportunities involves scoring each of them against the three criteria listed above.
Here is the process in more detail:
- Define key elements for each of the three criteria. Depending on the industry, each business should qualitatively define several key elements. A logging company, for example, will list environmental impact as a key suitability element and access to electricity as a key feasibility element.
- Using a spreadsheet, list each element under its relevant criteria heading in a column on the left-hand side.
- Weight each element according to importance. The logging company may assign a weight of 0.7 to low environmental impact and a weight of 0.3 for market demand. Ensure that the sum of all weights for each of suitability, feasibility, and acceptability adds up to 1.
- Then, score every key element against each strategic opportunity using a scale of 1 to 10. For example, the logging company may assign the environmental impact of clear cut logging (a strategy option) a score of 3. On the other hand, much more environmentally friendly selective logging may be given an impact score of 8.
- Multiply the weight of each element by the score assigned in step four. Selective logging is a low environmental impact strategy, so it would receive a score of 8 x 0.7 = 5.6. Then, add each score together. The strategy with the highest score is deemed the most suitable, but teams must avoid combining the best parts of multiple strategies into one.
- The SFA matrix enables businesses to evaluate and then select a strategic option from a range of choices.
- The SFA matrix considers three key criteria of strategy development: suitability, feasibility, and acceptability.
- The SFA matrix calculates weighted scores for predetermined elements the business deems important. Although the elements can be adapted depending on the industry, there must be standardization in scoring and in element identification itself.
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