SWOT matrix

The TOWS MATRIX is an acronym of the words: Threats, Opportunities,

Weaknesses and Strengths.
The TOWS Matrix is an effective technique that emphasize on the external
opportunities and threats while analyzing the internal strengths and
weaknesses of a company. The marketers find a strategic alternative to
assist the company to facilitate the external environment in correspondence
to the companys existing internal Strengths and Weaknesses. The TOWS
Matrix acts as a valuable method whether you are creating a marketing plan,
marketing campaign etc.
With the help of a TOWS Matrix, a company can easily identify how to take
advantage of the opportunities, reduce threats, exploitation of the strengths
and can prevail over the weaknesses.
In order to formulate different strategic alternatives, a company must
consider the fact that a strategy is an art for planning in order to bring about
the desired success of an organization. By identifying the strategic
alternatives, a company comes across with various questions like:
-

How to work effectively with the companys strengths?

How to overcome the weaknesses?
Embrace some advantage of the opportunities?
How to handle the threats?

The TOWS MATRIX does not only provide a list of strengths ,weaknesses
,threats and opportunities but works as a matching tool that helps to make a
pair of internal and external factors to bring out better solutions in the
current scenario of a company. The marketers/managers do not only
evaluate the four strategies but strives how to match together all the
external and internal factors to execute them in a best possible way.
According to Michael Watkins of Harvard Business Review , by focusing on
the external factors i.e. the threats and opportunities at first can lead to a
more productive outcome that elucidate whats happening in the external
settings rather to lay emphasis on the internal capabilities of a company.
THE TOWS MATRIX can be explained as the following:
1-

STRENGTHS:

Those attributes that makes the company stronger against its competitors
and can be effective to achieve the desired objective. For example, a
company who has the highest market share or produce the highest quality of
a product against its rivals.
2-

WEAKNESSES:

Those internal factors that can be risky for the company to achieve success
in the future. For example: A company who possess an outdated technology
and lacks innovation in products.
3-

OPPORTUNITIES:

Those external conditions that can be helpful towards the attainment of the
objective. For example: the new economic growth or the social changes in
the environment might be an advantage for a company.
4-

THREATS:

Those external settings that could be risky and harmful towards achieving
the objective. For example: Changes in the consumer buying patterns or the
competitor may come up with a product which has been more in demand.
The TOWS MATRIX helps to identify the strategic alternatives for a company
that works as a matching tool by constructing four types of strategies such
as:
-

THE SO STRATEGY:

This is also known as Maxi Maxi Strategy where a firm utilizes most of its
internal strengths in order to grab the right external opportunities. For
instance: A firm whose financial position is quite strong and posses low
market share is able to introduce many innovative products in the market by
making investment in the Research & development Department of the firm.
Mercedes Benz takes advantage of the external demand of their lavish
vehicles and makes right use of the technical skills and quality of their
products.
-

THE WO STRATEGY:

The WO STRATEGY is also known as Mini- Maxi Strategy that can be used to
overcome the weaknesses of a company by taking advantage of the
opportunities, For instance: A firm who lacks skilled workers can utilize the

opportunity by updating new technology in order to increase production. The

internal weaknesses of any firm can also be improved by recruiting and
training employees through learning additional technical skills.
A company who faces a decline in the financial sector can avail the
opportunity of merging with a multinational company.
-

THE ST STRATEGY:

The ST Strategy / Maxi-Mini Strategy is where a company through its

strengths can avoid any kind of external threats. Any organization can refrain
from external threats by avoiding any copied ideas, innovation in products of
another organization. In a case with an organization that possess good
quality of products but is facing threats against competitors who offers low
priced products can adopt ST strategy by mass production of the products,
therefore it will reduce the unit cost of production.
-

THE WT STRATEGY:

The WT Strategy Or Mini- Mini Strategy are adopted by firms who needs to
reduce the level of weaknesses and avoids any external threats at the same
time This can be considered as a defensive technique in a situation where a
company whose financial position is at the critical stage and the demand of
its product getting reduced, the only possible chance to sustain itself in the
market is to adopt a retrenchment strategy or decides for merger with an
another company.
However, The WT Strategy is difficult to implement in a situation with a
company whose distribution channel tends to be weak, if it gets improved by
chance, in that case it will be able to remove many external threats easily.
Following are the steps to construct a TOWS Matrix:
1- You need to identify and make a list of all the existing strengths of the
organization.
2- Identify and list down the most important weaknesses of the
organization.
3-

List down all the external threats that are faced by the organization.

4- Similarly, make a list of all the opportunities that can be advantageous

for the organization.

5- Now, to implement the SO strategy in the SO cell, you need to match

the appropriate internal strengths with external opportunities.
6- In the same way, match the right internal weaknesses with external
opportunities and type the correct WO strategy in the WO cell.
7- Similarly, make a match of internal strengths with external threats to
type the right ST Strategy in the respective ST cell.
8- Match all internal weaknesses with external threats to construct the
appropriate WT strategy.
The TOWS MATRIX is based on the fact as how a strategy can be
implemented, it does not claim which strategy can work best to put into
action. While creating the matrix, its important to denote each strategy with
a notation as (S1, O2) which represents rationalization for each strategy that
is being adopted.