The TOWS Matrix: A Modern Tool for Analysis of the Situation
Today strategy designers are aided by a number of matrices that show the relationships of critical variables, such as the Boston Consulting Group’s business portfolio matrix, which will be discussed later. For many years, the SWOT analysis has been used to identify a company’s strengths, weaknesses, opportunities, and threats. However, this kind of analysis is static and seldom leads t the development of distinct alternative strategies based on it. Therefore, the TOWS Matrix has beer introduced for analyzing the competitive situation of the company or even of a nation that leads to the development of four distinct sets of strategic alternatives)
The TOWS Matrix has a wider scope and a different emphasis from the business portfolio matrix. The former does not replace the latter. The TOWS Matrix is a conceptual framework for a systematic analysis that facilitates matching of the external threats and opportunities with the internal weaknesses and strengths of the organization.
It is common to suggest that companies should identify their strengths and weaknesses, as well as the opportunities and threats in the external environment; hut what is often overlooked is that combining these factors may require distinct strategic choices. To systematize these choices, the TOWS Matrix has been proposed, where T’ stands for threats, 0 for opportunities, W for weaknesses, and S for strengths. The TOWS model starts with the threats (Tin TOWS) because in many situations a company undertakes strategic planning as a result of a perceived crisis, problem, or threat,
Four Alternative Strategies
Figure 5-2 presents the four alternative strategies of the TOWS Matrix. The strategies are based on the analysi ...