SWOT OR TOWS Analysis (TOWS MATRIX)

SWOT is the acronym for strength, weakness, opportunities and strengths whereas TOWS is the acronym for threats, opportunities, weakness and strengths both refers to the same thing. SWOT or TOWS analysis use by the firm to develop strategies or we can say possible set of strategies. Strategist prefer SWOT or TOWS MATRIX because it gives alternative set of strategies which help the firm to choose the strategies suit the firm in terms of available resources.

SWOT analysis is not only the part of strategic management, it’s also the part of marketing, human resource and other business areas. In this tutorials we will discuss the way to develop TOWS matrix and its attributes in detail and also give examples to show firm develop strategies using SWOT or TOWS matrix.

What are the things need to be included in SWOT or TOWS matrix?

SWOT or TOWS matrix as discussed above consist of strength, weakness opportunities and threats, using these variety of strategies are developed. The most common tabular form of the SWOT or TOWS is shown in the figure below.

I would like to explain strengths,weakness opportunities and threats before going into details to make easier for the readers unfamiliar to this topic.

Strengths

Strengths are the strong areas or attribute of the company, which are used to overcome weakness and capitalize to take advantage of the external opportunities available in the industry.
Weakness

Weakness are painful for the company means these are the weak factors which needs to be improve in future otherwise if they exposed to the competitors they can take the advantage of it.

Opportunities
Opportunities are the chances exist in the external environment, it depends firm whether the firm is willing to exploit the opportunities or may be they ignore the opportunities due to lack of resources.

Threats

Threats are always evil for the firm, minimum no of threats in the external environment open many doors for the firm. Maximum number of threats for the firm reduce their power in the industry.

How to identify strengths,weakness,opportunities and threats for TOWS Matrix?

Well, if you have same question them its a good one, finding strengths, weakness, opportunism and threats is deep thinking process. The best thing to do ask the decision maker,employee, strategic partners and customer as well about your good and bad points. The other way out to use some statistical and mathematical tool.In strategic management strengths and weakness are extracted from IFE matrix, opportunities and threats from EFE matrix.

Example of Wal-Mart Strengths,Weakness,Opportunities and Threats
Wal-Mart Strengths


    * Customer oriented
    * SAM’S Club customers able to buy in bulk
    * Super centers offer one stop shopping
    * Satisfaction guaranteed programs promoting customer goodwill
    * Buy from local merchants when possible
    * Stock ownership and profit-sharing with employees
    * Leads industry in information technology
    * Ongoing development of its employees Strong community involvement


Wal-Mart Weakness


    * No formal mission statement
    * Membership only for SAM’S Club
    * Keep poor performing employees on hand
    * Old fashioned store policies
    * Few women and minorities in top management

Wal-Mart Opportunities

    * Consumers want ease of shopping
    * Internet shopping growing
    * Dollar value increasing
    * Similar shopping patterns worldwide
    * Retail sales expected to increase
    * Environment conscious consumers
    * Elderly population growing
    * Asian market virtually untapped by retail
    * European Market untapped by retail


Wal-Mart Threats

    * Regulation of Wal-Mart pharmacies
    * Small towns do not want entry of Wal-Mart
    * Bad media exposure for Kathie Lee Brand
    * Variety of competition nationally, regionally and locally
    * Substitute products more easily because of intense competition


What type of strategies are the part of TOWS Matrix?

The SWOT Matrix is an important matching tool that helps managers develops four types of strategies:

   1. SO strategies—use a firm’s internal strengths to take advantage of external opportunities.
   2. WO strategies—are aimed at improving internal weaknesses by taking advantage of external opportunities.
   3. ST strategies—use a firm’s strengths to avoid or reduce the impact of external threats.
   4. WT strategies—are defensive tactics directed at reducing internal weaknesses and avoiding external threats.


Example of Pakistan State Oil TOWS Matrix


The above TOWS matrix show the four type of strategies, SO strategies are developed using PSO strengths to exploit the external opportunities, WO strategies are developed to overcome weaknesses by utilizing the opportunities. ST strategies are developed by PSO to minimize or eliminate the threats using the internal strengths and last WT strategies are developed to avoid threat and minimize weaknesses.