A TOWS analysis is a variant of a SWOT analysis and is an acronym for Threats, Opportunities, Weaknesses and Strengths.
Similar to a SWOT, a TOWS analysis will involve the identification of an organisation’s strengths, weaknesses, opportunities and threats; however, often a key criticism of a SWOT analysis is that it doesn’t show the relationships between the different factors and categories. For example, a particular threat might make a weakness much more significant. Whereas a TOWS analysis will look to match internal factors to external factors to help identify relevant strategic options that an organisation could pursue. It can help an organisation to see how it can take advantage of opportunities, reduce threats, overcome weaknesses and exploit any strengths
A TOWS is a commonly used strategic planning tool and can add real value to an organisation, helping to take strategic planning one step further. Below is an example TOWS matrix.
A TOWS analysis enables an organisation to match its internal strengths, and external opportunities (SO) to develop ‘maxi-maxi’ strategies – those with the greatest potential for success. For example, strengths such as high brand recognition or customer loyalty could be combined with the opportunity to launch a new product or service.
At the other extreme, it highlights the organisation’s vulnerability to threats based on its weaknesses and facilitates the development of strategies that minimise these and avoid threats (WT) – ‘mini-mini’ strategies. For example, such strategies could include developing strategic alliances or a more drastic strategy could be to withdraw from a specific market altogether.
In between, mini-maxi (WO) and maxi-mini strategies (ST) are designed to strengthen weaknesses, utilising opportunities, and minimise threats utilising strengths. An example mini-maxi strategy (WO) is that an organisation may have identified an opportunity to outsource some aspects of its business operations, overcoming the weakness of lack of specific skills within the organisation.
It’s important to remember that a TOWS analysis will not point to which specific strategy to adopt, but it does focus attention the areas where action is required, and given some indication of the nature of that action.
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