THE TOWS MATRIX

The TOWS Matrix or TOWS Analysis is a variation of the SWOT Analysis. 

You still have to identify your strengths, weaknesses, opportunities and
threats as what you do wiith SWOT, but instead of filling up four cells in the
matrix, there are nine cells.  Nonetheless, this tool is used to identify your
strategic options based on how the four factors may be combined.  The
TOW Matrix looks like this:

The table above shows the SWOT factors listed at the outermost cells. 
Opportunities and threats are listed horizontally while strengths and
weaknesses are placed vertically.  The first cell on the upper left is used as
a separator for the environments.  The remaining four cells are labeled S-
O, S-T, W-O,  and W-T strategies.  These are devoted to the strategic
options that may be formulated from the combination of the factors.
Strategic Options Using TOWS
Four sets of strategic options may be generated from the matrix.  The brief
definitions of these options are found below:
 1. S-O Strategies

 These are called "maxi-maxi" strategies because they maximize

strengths by maximizing opportunities.
 They are considered offensive strategies as they are used to pursue
competitive advantages in the market.
 An example of this would be when a company possesses exceptional
skills in online advertising (strength) and an observed opportunity is that
a large portion of the market responds to online advertising (opportunity). 
Combining these factors, the company may develop an online advertising
campaign to maximize sales of products online.  With reference to the
types of strategies in Topic 2 of Module 4, this strategic option may fall
under market penetration if the company already sells online, or may
be market development if the company has not started selling on this
platform.
 2. S-T Strategies

 The combination of strengths and threats, which are also known as

"maxi-mini" strategies.  
 "Maxi-mini" stands for maximizing strengths by minimizing threats.
 These are also considered offensive strategies because of the use of
strengths in pursuing competitive advantages over rivals.
 To use this, let's say, with the expertise in online
advertising (strength), a company may be able to address the threat of
pandemic to selling in physical stores (threat).  This strategy may be
classified as market development under types of strategies.

3. W-O Strategies

 Otherwise known as "mini-maxi" strategies, these are defensive

strategies designed to minimize weaknesses by maximizing
opportunities.
 An example would be when the company has declining sales in
physical stores (weakness) and there is the presence of an online
market (opportunity).  Here the strategic option would be to shift to the
online market or to offer the products online.  This strategy is considered
a market development approach as there is a change in the market
explored.  

4. W-T Strategies

 These strategies are considered to be the most defensive of all set of

strategic options since the goal in using them is to minimize weaknesses
and minimize threats, thus the name "mini-mini" strategies.
 Specifically, to accomplish this, the weakness should be converted
into a strength to be able to minimize the impact of the threat.
 These strategies are resorted to when the company is suffering from
a weak competitive position or bad performance.
 An example would be when a company is losing profits due to poor
distribution (weakness) and then there are stronger competitors with
established distribution networks (threat). To address this situation, the
losing company may consider entering into a joint venture with a strong
distribution company to bring its products to the market.  

Sample TOWS Matrix

 Let me share with you a sample TOWS matrix which I prepared as a
student for my strategic management class in a doctorate program.  The
matrix is prepared for a school.  The TOWS matrix is as follows:

The table shows the SWOT factors listed on the outermost cells.  Three for
each set were identified.  On the cells for strategies, two were identified for
each of the S-O, S-T, W-O  and one for the W-T strategies.  After each
strategy, the factors combined were identified (ex. S1, S2, O1).  This is to
emphasize the particular factors utilized in creating the strategic options. 
The name of the particular type of strategy is not specified in the matrix, but
this could be included for increased clarity in designing the plan of the
company.  To illustrate, the first S-O strategy is a market
penetration strategy while the W-T strategy is conglomerate diversification.
Steps in preparing a TOWS Matrix
Let us draw our process from what we have just done for the TOWS
analysis:

 First, list opportunities and threats.  This should be lifted from the
SWOT, STEEP and Five-Forces Framework analyses done under
external scanning.
 Second, list strengths and weaknesses.  This is from our internal
SWOT analysis and the 7S Framework of internal scanning. 
 Third, identify possible combinations from the list of factors.
 Fourth, write down the strategic options based on their categories in
the four cells of the TOWS matrix.
 Lastly, identify the type of strategy you have created in the matrix.