Daily Archives: November 18th, 2012

The TOWS Analysis

You’ve likely heard of the age-old SWOT analysis and its myriad of uses. SWOT simply stands for strengths, weaknesses, opportunities and threats, where each of these headings placed within a square grid. Companies use this universal planning tool to align their marketing strategies, address their deficiencies in operations, improve sales and customer service, reduce supply chain costs and improve a number of other business related activities.

 

Unfortunately, this planning tool is somewhat limited in its ability to define these four aforementioned categories. For instance, a company may see its threats differently from how its market and customer base sees them. In addition, the SWOT tool doesn’t allow for an easy transition from high level strategy, to individual plan. Where the SWOT fails, the TOWS analysis succeeds

 

TOWS Analysis is a variant of the classic business tool, SWOT Analysis. TOWS and SWOT are acronyms for different arrangements of the words Strengths, Weaknesses, Opportunities and Threats.

 

By analyzing the external environment (threats and opportunities), and your internal environment (weaknesses and strengths), you can use these techniques to think about the strategy of your whole organization, a department or a team. You can also use them to think about a process, a marketing campaign, or even your own skills and experience.

 

Identifying Strategic Options

SWOT or TOWS analysis helps you get a better understanding of the strategic choices that you face. (Remember that “strategy” is the art of determining how you’ll “win” in business and life.) It helps you ask, and answer, the following questions:

How do you:

  • Make the most of your strengths?
  • Circumvent your weaknesses?
  • Capitalize on your opportunities?
  • Manage your threats?

 

A next step of analysis, usually associated with the externally-focused TOWS Matrix, helps you think about the options that you could pursue. To do this you match external opportunities and threats with your internal strengths and weaknesses, as illustrated in the matrix below:

 

This helps you identify strategic alternatives that address the following additional questions:

  • Strengths and Opportunities (SO) – How can you use your strengths to take advantage of the opportunities?
  • Strengths and Threats (ST) – How can you take advantage of your strengths to avoid real and potential threats?
  • Weaknesses and Opportunities (WO) – How can you use your opportunities to overcome the weaknesses you are experiencing?
  • Weaknesses and Threats (WT) – How can you minimize your weaknesses and avoid threats?
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