Strategic grid model



The strategic grid model is a contingency approach that can be used to determine the strategic relevance of IT to an organization. The model was proposed by F. Warren McFarlan and James L. McKenney in 1983, and takes the impact of the information technology on the strategy in future planning as the horizontal axis, and the current impact of the information technology on corporate strategy as the vertical axis, which is divided into four types: support, turnaround, factory, and strategic.

Overview
Strategic grid model has four quadrants built around two straightforward questions: Depending on the responses to these questions, a company can be placed in the four quadrants as follows:
 * How important the management feels the current IT systems are to the company.
 * How important the company thinks future developments in IT will be, ie the impact of future IT developments on its way of doing business.

Analysis
In order to assess the strategic impact of IT, McFarlan proposed the analysis of five basic questions about IT applications, related to the competitive forces: Nevertheless, these questions should take into account current and future planned circumstances. Thus, IT may present a smaller or greater importance, according to the kind of company and industry operations.
 * If IT applications can build barriers to the entry of new competitors in the industry
 * If IT applications can build switching costs for suppliers
 * If IT applications can change the basis of competition
 * If IT applications can change the balance of power in supplier relationships
 * If IT applications can create new products