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TOWS Matrix
The TOWS Matrix is derived from the SWOT Analysis model, which stands for the internal Strengths and Weaknesses of an organization and the external Opportunities and Threats that the business is confronted with.
The acronym TOWS is a variant of this and was developed by the American international business professor Heinz Weirich.
The TOWS Matrix is aimed at developing strategic options from an external-internal analysis and is a practical tool, particularly in the fields of business administration and marketing.
The other way around
Whereas SWOT Analysis starts with internal analysis, the TOWS Matrix starts the other way around, with an external environment analysis; the threats and opportunities are examined first.
From that standpoint, an organization gets a clear picture of its environment and the opportunity to think about strategy and what direction the company will go in. Next, the company’s strengths and weaknesses are considered; what it’s good at internally and what it’s not so good at.
The external analysis is linked to the analysis and the resulting TOWS Matrix can help an organization to make decisions better, seize opportunities, and protect itself better against threats.
Strategic options
The TOWS Matrix helps businesses to identify their strategic options. An organization gets the opportunity to make the most of its strengths and get around its internal weaknesses and learn to deal with them properly. Externally, an organization learns to carefully look for market opportunities and recognize possibilities. And they learn how to control and overcome potential threats.
The TOWS Matrix can also help with brainstorming and developing great ideas to generate effective marketing strategies and tactics. Furthermore, the model goes beyond merely finding out the strengths and weaknesses of an organization and what opportunities and threats there are in its environment. It forces organizations to really think about how they can improve themselves, how they can guard against threats, and become more aware of their expertise and potential shortcomings.
External environment
The TOWS Matrix is not just meant for the highest levels of management in an organization. It can be a very useful tool for departments (i.e. a marketing or sales team) or for individual employees on an operational level. Once it’s employee’s or a department’s strengths are known, these can be improved further to become even better. The TOWS Matrix emphasizes the external environment.
It starts by analyzing external opportunities and threats. Up next are the internal strengths and weaknesses, which will subsequently be linked to the external analysis. And this is where it goes a step beyond the traditional SWOT analysis; strategic tactics emerge by opposing S-O (Strengths-Opportunities), W-O (Weaknesses-Opportunities), S-T (Strengths-Threats) and W-T (Weaknesses-Threats).
A next step in the analysis helps when thinking about the option they want to pursue. Here the external opportunities and threats are compared to the internal strengths and weaknesses to help identify strategic options:
- Internal Strengths and External Opportunities (S-O) – how can they use the strengths to benefit from existing external opportunities?
- Internal Strengths and External Threats (S-T) – how can they benefit from their strengths to avoid or lessen (potential) external threats?
- Internal Weaknesses and External Opportunities (W-O) – how can they use opportunities to overcome the organization’s internal weaknesses?
- Internal Weaknesses and External Threats (W-T) – how can they minimize weaknesses and thus avoid potential threats?