TOWS Matrix

The TOWS Matrix is a framework that enables businesses to come up with business strategies based on its SWOT analysis, by connecting the internal as well as the external factors (Weihrich, 1982). Considering the strengths, weaknesses, opportunities (SWOT) and these in mind, further strategies are formulated.

Advantages of Using the TOWS Matrix

A TOWS MATRIX enables a firm to match its internal strengths, and external opportunities to identify future strategies – those with the greatest potential for success. For example, strengths such as high customer loyalty could be combined with the opportunity to launch a new product or service.

TOWS MATRIX also reveals an organisation’s vulnerability to threats based on its weaknesses and helps identify the development of strategies that minimise these or avoid threats. For example, using strategies such as developing strategic alliances.

How to Complete TOWS Matrix from SWOT Analysis:

TOWS matrix is a useful tool to assess the overall attractiveness of a business using the opportunities and threats that it faces by combining each with the strengths and threats as follows:

SO (Use strengths to max opportunities)

Generate options here that use strenghts to take advantage of opportunities.

WO (Minimize weakness by taking advantage of opportunities)

Generate options here that take advantage of opportunities by overcoming weaknesses.

ST (Use strengths to minimize threats)

Generate options here that use strenghts to avoid threats

WT (Minimize weakness and avoid threats)

Generate options here that minimise weaknesses and avoid threats.

How to use SWOT Analysis to identify future strategies?

Here’s how to use SWOT Analysis to identify future strategies.

• Capitalise on Opportunities that are better suited to the Small firms strengths eg: Diversifying away from a business that is exposed to serious threats & focus on promising opportunities.
• Work on the Weaknesses eg: Raising funds, recruiting skilled staff, investing into new technology/ processes/ systems, improving staff morale.
• Protect the firm against Threats eg: Build strong relationships with suppliers, be proactive to competitor moves, develop contingency plans for crisis.

Examples – TOWS MATRIX

Here’s an example of a TOWS MATRIX that shows possible strategic options for a new brand of Milkshakes.

THREATS

• Awareness about healthy eating due to various Government schemes promoting healthy eating and celebrity culture that is influencing healthy eating.
• Increase in taxes on certain food.

OPPORTUNITIES

• Good demand (in other countries). Possibility to merge with international companies
• Growth in technology such as social media.

WEAKNESSES

• Is considered unhealthy due to high calories.
• Lot of competitors • They only have one main supplier

STRENGTHS

• Strong market positioning
• Continuously expanding
• Seen as an ethical company

SO (Use strengths to max opportunities)

• Use of social media to create awareness, encourage demand, and create brand loyalty.
• Launch the products abroad to create wider market for the product and enable the company to expand
• Develop more ethical and environmentally friendly products to increase customer base

WO (Minimize weakness by taking advantage of opportunities)

• Creating an international brand could minimise competition
• More availability to a wider range of suppliers (cheaper/better quality produce)
• Use social media to advertise healthier innovated products

ST (Use strengths to minimize threats)

• Use celebrities to endorse and market the products to promote growth of the brand
• Use market power to promote potential health benefits from drinking the milkshakes

WT (Minimize weakness and avoid threats)

• Innovate the product to create a healthier soft drink
• Use celebrities to advertise and promote the products to increase demand
• Find cheaper/several suppliers to reduce costs, therefore lowering prices

Here are a couple of nice videos that show how to develop a TOWS strategy matrix.

References

Weihrich, H. (1982). The TOWS matrix—A tool for situational analysis. Long Range Planning, [online] 15(2), pp.54–66. Available at: https://doi.org/10.1016/0024-6301(82)90120-0