TOWS Matrix

• A SWOT analysis helps assessing a company’s current internal and external

situation, but does not provide concrete strategic actions to take. One way to
map out the strategic options a company has, is by using the so called
TOWS matrix (or TOWS analysis).
• Developed by management consultant Heinz Weihrich.
• The TOWS Matrix, then, is a much more useful graphical representation of a
SWOT Analysis. Internal strengths and weaknesses are compared to external
opportunities and threats. Every one of the four individual factors can
influence and impact each other.
• It is a conceptual framework for a systematic analysis that facilitates
matching the external threats and opportunities with the internal
weaknesses and strengths of the organization.
 Steps of TOWS analysis

• Identification of enterprise profile (industry, customers, needs, trends), strategic goals(

mission and vision of managers) and resources of organization (financial, material, employee,
knowledge and information),
• Identification of the external environment to the organization (external factor influencing its strategy
, political, legal, economics, technology, social and cultural, ethical),
• Forecasting possible changes of environment and its influence on organization (scenario analysis,
trends, perspectives),
• Audit and assessment of internal resources of the organization to identify weaknesses and strengths,
• Preparation of interaction matrix between TOWS factors, and indicating best alternative strategies,
• Evaluation of alternative strategies, evaluating feasibility of various possible actions, choice of best
strategies,
• Testing internal consistency of identified portfolio of strategies (in relation to competition and
environment),
• Preparation of contingency plans in case of failure of the undertaken actions.
 SO situation: Maxi-Maxi strategy

  Strengths (S) Weaknesses (W)

• In this quadrant of the TOWS
Opportunities
(O) SO STRATEGIES   Matrix, a business must assess its
 
How can you use  
your strengths to WO STRATEGIES strengths on a case by case basis
take advantage of to determine if it can use them to
the opportunities? capitalize on opportunities.
• This situation applies to the
company for which dominates
Threats (T)
      strengths in the environment and
   
ST STRATEGIES WT STRATEGIES opportunities within. This
  situation corresponds to the maxi-
  maxi strategy: strong expansion
 
and diversified development.
 ST situation: Maxi-Mini strategy:

  Strengths (S) Weaknesses (W)

Opportunities
(O)
 
 
 
 
 
• Here, the business should assess
    each strength based on its ability
SO STRATEGIES WO STRATEGIES to counteract or avoid external
  threats.
 
  • The source of development
difficulties for the company are
Threats (T)
 
ST STRATEGIES   unfavorable external conditions
How can you take   (prevalence of threats). The
advantage of your WT STRATEGIES company may use large internal
strengths to avoid strengths in attempt to
real and potential
threats?
overcome threats from
  environment.
 WO situation: Mini-Maxi strategy

  Strengths (S) Weaknesses (W)

Opportunities
(O) WO STRATEGIES • In the WO quadrant, an
  How can you use organization must determine how
SO STRATEGIES
your opportunities its weaknesses can be eliminated
to overcome the or offset by external
  weaknesses you opportunities.
are experiencing?
• In this situation company has
Threats (T)
    more vulnerabilities - weaknesses,
 
    but its environment gives more
ST STRATEGIES WT STRATEGIES opportunities. The strategy should
  include the use of these
  opportunities while reducing or
 
correcting weaknesses within the
organization.
 WT situation: Mini-Mini strategy

  Strengths (S) Weaknesses (W)

Opportunities
(O)
    • The company in this case has
      little development opportunities.
SO STRATEGIES WO STRATEGIES
  It operates in a hostile
  environment and its potential for
change is small.
Threats (T)
  WT STRATEGIES • Mini-Mini strategy boils down to
 
  How can you a pessimistic scenario such as
ST STRATEGIES minimize your the liquidation of a company or
  weaknesses and in an optimistic situation – to
 
 
avoid threats? strive for survival by merging
with another organization.