The SWOT analysis is a study undertaken by a company or organization to study the framework of the same. The entire functioning of the organization is analyzed by studying it from various perspectives so as to identify possibilities and problems and therefore design their course for the future. The SWOT analysis is a framework which is used to assess a company’s position vis-a-vis competitors in the market by studying and identifying their strengths (S), weaknesses (W), Opportunities (O) and threats (T). Strengths and weakness are internal factors where as opportunities and threats are external. With some thought this perusal helps uncover a range of options that are waiting to be utilized. When this same combination of words is re-arranged its acronym spells out TOWS.
The SWOT is the theoretical analyzing aspect of the study of these external and internal factors and how they affect a business or venture individually or in combination of two or more factors. After the SWOT analysis has been performed, the next step requires a practical application of the data accumulated during the study so as to use and apply it to a working model. This derivation of the strategic applications from the audit and analysis is referred to as the TOWS matrix. This matrix is a vehicle for selecting options and strategy generation and planning the future course of action.
This approach and methodology for the future plan of action is subjective in nature to a business or organisation. It is imperative that the organization remains specific and focused on diluting the grey areas which have been highlighted in the SWOT study. It is also important to look into new mergers, product development, innovations and capturing new markets while planning the road ahead.
This TOWS matrix follows a 4-fold approach in the planning process which we shall discuss here.
• Strength/Opportunity (S/O): This approach requires that the organisation make use of their internal strengths so as to make the most of the external opportunities available to them. This is referred to as the “maxi-maxi strategy”. This is the brightest aspect of the entire planning process and must be exploited as far as possible for a successful overturn.
• Weakness/Opportunity (W/O): This crossover requires that the internal weaknesses of the organisation are eliminated or at least minimised by using the external factors that are working in their favour and avail the opportunities. This is the “mini-maxi strategy”.
• Strength/Threat (S/T): These are the strategies that used so as to put the internal strengths into action so that the external threats can be handled effectively. This is the “maxi-mini- strategy”.
• Weakness/Threat (W/T): Since this is an aspect that brings two negatives together, it is referred to as the “mini-mini strategy”. Here strategies are devised so that the internal weaknesses and external threats are both reduced as far as possible. This is the inevitable slump that every organisation or venture may face during their planning process.
The TOWS Matrix is represented by a 2X2 grid just like the SWOT analysis.
The TOWS matrix is the second step in the planning process which follows after the SWOT analysis. Much like SWOT, the TOWS also requires a timely re-investigation so as to keep the organisational machinery well oiled. Since the study is so thorough in nature, the TOWS matrix also makes place for alternate strategies as a back-up course of action in case the first fails for any reason(s). Analysts and specialists are employed for this purpose so that the best result can be sought.