TOWS Matrix can be defined as the tool to analyze, generate, compare, and select the

business strategies to attain the overall goals and objectives of the company such as

higher sales, increased profits, and enhanced brand value amongst other crucial ones. 

TOWS Matrix follows the roots of SWOT Analysis but is quite indifferent from the same
as SWOT Analysis mainly focuses on the aspects of opportunities and threats whereas
TOWS Matrix is the tool for strategy generation and selection.

SWOT Analysis is the tool for audit and analysis of the business and is used at the
beginning of the planning process and TOWS Matrix is opted at the later part of
the planning process to decide the way forward for the business.

It is the work of the trade-off between the internal and external factors of the company
and the outside environment that affects the operations and overall objectives of the
business.

The strengths and weaknesses are a part of the internal environment of the business
that comprises of employees and staff, HR policies, work culture, nature, features, and
attributes of the products and services offered to the target market, manufacturing
processes and techniques, goals and objectives, core values, and fundamentals of the
company. Most of the times, the internal factors are controllable in nature.

The opportunities and threats are a part of the external environment that comprises of
government policies, direct and indirect competition in the market, evolving and
changing tastes and preferences of the customers, dynamic nature of the market, and
fluctuation rates of the raw materials required for the production along with other such
extrinsic factors that are many a times not in control of the business and management
of the company.

Rules of TOWS Matrix:

1. The analytical methodology and approach of TOWS Matrix are quite subjective in
nature like many other tools, frameworks, models, and concepts to come up with
the business strategies that are edgy and outlandish in nature to accomplish the
aims and objectives of the company. Depending on the merit of the situation and
all the internal and external factors affecting the business, it is as robust as the
data that is being included in the model.
2. It is quite mandatory to be very specific in the overall approach and process
eliminating all the grey areas so that the strategies arrived is feasible, realistic,
and functional in nature.
3. Brainstorming is very critical in using the TOWS Matrix, this will provide us an in-
depth analysis of different strategic alternatives. Identifying pros and cons for
each alternative is necessary leading us to a scenario based approach in
 decision-making. This will make our choices safer, however, please note that the
lesser the risk, the lesser the outcome.
4. It is always advisable to second the final analysis of the TOWS Matrix with the
other strategic models such as Porter’s Generic Strategies and others that provide
competent results.
5. It is necessary that the strategy should include the internal growth
and development of the company by the way of mergers or joint ventures,
acquisitions, new product development, capturing
new markets and target audience.

The 4 TOWS Matrix Strategies:

Strengths and Opportunities in TOWS Matrix / SO

The first and foremost strategy of the TOWS Matrix involves the using of internal
strengths of the company to make optimum use of the external opportunities available
to the company. Example: If the company has developed a niche and distinct brand
image in the market and minds of the consumers and there is an opportunity to tap the
new market locations or coming up with the new line of products and services for the
same target market, it is one of the best options for the growth of the firm.

2) Weakness and Opportunities in TOWS Matrix / WO

The second strategy in the line of TOWS Matrix indicates that the management of the
company will find various options and alternatives to overcome the weaknesses and
take advantage of the opportunities that are coming in the way. It is the best way to
diminish the weakness and exploit the opportunities. Example: If the company is not an
expert in any of the business facet that is required for the growth and success and is
presented with the opportunity for an alliance with the other company that has the
required expertise, it works as a win-win situation for both the parties involved.

3) Strengths and Threats in TOWS Matrix / ST

This strategy of the TOWS Matrix implies that the management of the company would
exploit all the internal strengths to overcome any of the potential threats that in the way
of the business to accomplish the desired goals and objectives. Example: If the
company is facing the astute competition for the existing players in the market or from
the new entrants that are offering the new and innovative range of the products that are
similar to the ones offered by the company, the company needs to harp on the internal
strengths such as quality of the offerings, authentic manufacturing techniques, customer
service, and rich legacy of the brand amongst others.
4) Weaknesses and Threats in TOWS Matrix / WT

This one is the least appealing strategy of the TOWS Matrix as which company would
harp on its weaknesses to overcome the external threats on the business. It is always
advisable to minimize the weaknesses to avoid the possible threats.

This is normally being utilized to identify potential hindrances to the plan specifically if
the combination between a weakness and a threat would occur. For example, a burger
company with a declining financial leverage is experiencing losses from its main
distribution outlets due to a region-wide spread of animal diseases particularly affecting
swine and poultry products.

An in-depth analysis would show that the company has a growing liability which also
affects its liquidity and credit rating which is a weakness, now matched with another
weakness which are outlets losses due to animal product diseases that becomes your
threat. Your options from this may include:

1. Outside region procurements;

2. Push products that are not affected by the threat;
3. Check existing potentials of losing outlets which may lead to shutting down
heavily affected outlets; and others.

The question is which among these alternatives is viable considering your credit rating?
Would your choice/s be enough to cover losses?

FOR YOUR REQUIREMENT:

Use the TOWS Matrix to develop strategic alternatives for Snoozy Inn.

Prepare an Action Plan using a Planning Matrix as illustrated on next page.

PLANNING MATRIX

A logical framework inspired by a Gantt-Chart to layout tactical (short-term plan) or plan

of action usually used to address specific problems or actions to take from a strategy.

It is important to note that the set objectives and activities should be in its logical flow.
The framework should show that one accomplishment would lead to accomplishment of
the succeeding objectives.
Example:

Using the problem discussed in number 4 (W-T), other details included:

1. Quarter-losses on fast food industry has a record high of 32%.

2. Three of the company’s main distribution outlets experienced an average of 54% losses on revenues.
3. The company’s losses greatly affect its liquidity.
4. The animal product disease has no health impact on human.
5.
The main strategy here is to reduce the impact of the threat.

General Objective: Recover at least 30% of the losses incurred from the current quarter due to animal diseases for the
next quarter of operation. (Specific, Measurable, Attainable, Realistic, Time-bound)
Specific Objectives Activities Time Frame Indicators Means of Verification
1. Increase sale of - Promotion etc Within the first month - Amount of - sales invoices
unaffected (needs to be of the quarter; or sales per - sales report
products by itemized as to by the month of May product - product
20% the approach) - %age of sales inventory report
as compared to
previous
quarter
2. minimize losses - promos on how - before the end - Amount of - sales invoices
from affected product is of the current sales per - sales report
products by prepared quarter product - product
15% - %age of sales inventory report
as compared to
previous
quarter

Another strategy is to increase liquidity of the company. (Example approaches: receivable collection; re-financing of short-
term liabilities to long-term liabilities, etc.) the objective is to increase favorability of company credit rating.