The TOWS Matrix – How To Implement It?

TOWS Matrix is a framework for evaluating the company strategy, creating, comparing it, and eventually deciding. It is a modified form of the SWOT analysis and represents the threat, opportunity, weakness, strength, and abbreviation.

In 1982, it was created to study companies from an effective viewpoint regarding administration and marketing by an American corporate professor, Heinz Weirich. The assessment is carried out by combining outside possibilities and threats with the internal strengths and weaknesses of a firm.

Apple, Amazon, and Google — we’ve all heard of these multibillion-dollar corporations and are familiar with their goods. Since its inception, they have been able to withstand the ups and downs of the economy and have effectively built brand value.

All three firms must have done something well to help them stay in the game for the long haul, as opposed to other businesses that couldn’t maintain themselves or have gone out of business. Analysts use marketing methods to figure out the answers to such statements.

Today at DigitalGyan, we’ll look at one of these theories, TOWS Matrix, in order to get the answers we’ve been looking for.

What is the TOWS Matrix?

The assessment of external risks and opportunities starts at TOWS Matrix. This examination offers a clear understanding and supports the adoption of long-term plans. Then a firm takes account of the internal strengths and limitations. In the following phase, internal analysis is linked to external analysis in order to develop a plan.

TOWS Analysis goes far further than standard SWOT Analysis and supports companies to stay in a shifting competitive landscape one step ahead. While internal and external forces are irreconcilable, a balance between them still exists.

Strengths and weaknesses are internal and consist of HR policies, production processes, aims and objectives, product and service characteristics for the target market, core values, a work culture, employees, and the corporate basics.
Opportunities and threats, On the other hand, lie within external variables, which include government regulations, a dynamic market character, a changing taste, and customer choice, market rivalry, fluctuations in raw material production, and so on.

the tows matrix - how to implement it?

Now we will talk about the four possible methods of the TOWS matrix. There are four TOWS policies:

  • Strength/Opportunity (SO)
  • Weakness/Opportunity (WO)
  • Strength/Threat (ST)
  • Weakness/Threat (WT)

Strengths and Opportunities (SO) / Maxi-Maxi Strategy

The objective of the Maxi-Maxi strategy is to harness internal strengths so that the firm may make the most use of its external possibilities. This means that the firm needs to use its capabilities to cash out possible possibilities from its resources.

For instance, if a firm has created a reasonable brand name and has won the hearts of the consumers, it may search for new places on the market or introduce a new line of products and services to the same target market. Such a step might be the finest way to raise the company.

Strengths and Threats (ST) / Maxi-Mini Strategy

The objective of a Maxi-Mini strategy is, while reducing the dangers, to maximize a company’s strengths. A firm should thus use its own forces to prevent large external threats. This approach shows that the management can use all of the internal strengths to tackle any of the risks the firm might face as barriers.

Example: There is always a rivalry between new and old participants on the market. The trailing firm must use its inner force, such as quality, manufacturing technology, heritage, and customer service in such a circumstance to overcome the competition.

Weakness and Opportunities (WO) / Mini-Maxi Strategy

The Mini-Maxi method tries to reduce the vulnerabilities and maximize the possibilities. The goal is to rectify internal deficiencies by using exterior possibilities. The company’s management will find different alternatives to look beyond the flaws and regulate the occasions that arise. A good selection to decrease or rectify flaws and untapped possibilities is always a matter of fact.

Example: If the firm lacks the knowledge needed for growth in any business field and gives it a chance to partner with an enterprise with the necessary skills, the scenario is beneficial for both organizations.

Weakness and Threats (WT) / Mini-Mini Strategy

The Mini-Mini Strategy’s objective is to reduce vulnerabilities and dangers as well. The most defensive place in the TOWS matrix is certainly. It is used primarily in a terrible position of a corporation. The business works in this setting in an aggressive environment with little or no possibilities for development. The mini-mini approach is nothing more than a gloomy winding up of an enterprise.

EXAMPLE: A company’s splendor and shine have been gone, and stakeholders have lost their faith. There is therefore a potential to lose out on investors’ money and investment. In this situation, it might close goods that are not well available, reduce underperforming staff and develop a hostile marketing method. If hopeful, the firm might seek a merger with another appropriate company to use its experience and resources to invest.

the tows matrix - how to implement it

Advantages & Disadvantages of TOWS Analysis

Advantages of using TOWS Matrix

  • The TOWS Analysis helps to break with strategic concepts by linking the companies with their internal and external variables.
  • In nature, it is economically efficient.
  • After understanding some parameters, it is user pleasant and can be carried out by a layperson.
  • Any firm regardless of industry and economies may be tested for TOWS Analysis.
  • It allows organisations to change dynamics in their strategy.

Disadvantages of TOWS Matrix

  • If we are overburdened with information, TOWS analysis is difficult to handle.
  • TWOS Matrix sometimes fails to take account of the continuously evolving competitive environment and might influence the major objective for developing a strategy for the company with a view to achieving high profits, higher sales, brand value generation and so on.

Is the TOWS and SWOT matrix the same?

SWOT matrix is a tool for planning, and TOWS matrix is a tool for action. You can detect all strengths, weaknesses, opportunities, and threats in point form in the SWOT analysis. Then you see every point as a unique point of view.

TOWS matrix, however, determines the connections between these elements and chooses tactics based on them. Weaknesses and strengths are abstract ideas that might be difficult to imagine without context.

Difference between TOWS and SWOT matrix

  • A tool for action is the TOWS matrix and a tool for planning the SWOT matrix.
  • Their strengths, weaknesses, opportunities and threats are identified by businesses in SWOT analyses.
  • Thought TOWS matrix organisations, which detect the link and select strategies based on these variables.
  • Often managers cannot agree with the strategic decision the outcome needs when doing the swot analytical testing.
  • The progressive advantage of the TOWS matrix by connecting organisational strength and weakness with outside opportunities and dangers.
  • Compared to SWOT analysis, TOWS matrix is a larger scope.
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