Level up your SWOT – consider TOWS instead!

by | Apr 27, 2023

Whether you are a small start-up or a corporate enterprise, strategic research and intelligence can support your company in maintaining market competitiveness and reaching long-term objectives. There are several intuitive frameworks that are useful to support your organization in making strategic decisions that drive competitiveness and success. SWOT is a common framework, and one often requested of the team at HelloInfo. A closely related, but less-requested tool is the TOWS framework. Here at HelloInfo, we feel there is a place for both the SWOT and TOWS analysis and recommend the TOWS regularly to clients. Before we get in too deep, let’s set the stage on what these two tools are – then we’ll provide more detail on how to execute a TOWS analysis.

What are SWOT and TOWS?

A SWOT analysis is an internal tool that compiles your company’s strengths, weaknesses, opportunities and threats, providing full awareness of the internal and external factors involved in making a business decision. A SWOT analysis is often conducted first and prioritizes the internal environment, with the TOWS analysis then being conducted to flip the logic by looking at the market landscape from the perspective of the external environment first. TOWS connects external opportunities and threats to internal strengths and weaknesses, enabling companies to generate tangible action plans and market strategies in response to these factors.

While the models are often used complementary to one another, the SWOT matrix is often seen as a strategic “planning” tool, while the TOWS matrix is seen as an “action” tool. The relationship between the factors identified in a SWOT form the basis for developing TOWS strategies that help organizations capitalize on strengths, minimize weaknesses, take advantage of opportunities, and mitigate threats.                                                                                                                                                                  

What are TOWS strategies and how are they used in strategic planning and competitive intelligence?

TOWS strategies can be developed for a variety of business objectives and can be a great tool to support your company in competing more effectively. By forming relationships between your company’s external and internal environments, you can build actionable strategies that capitalize on your strengths and market opportunities to compete more effectively. Examples of strategies include diversifying into new markets or product areas, improving the quality of your product, or undertaking a variety of cost reduction measures.  

When building the TOWS matrix, it is important to rank each of the items in your SWOT analysis in their respective categories in order of importance, from most to least important. This will help you better visualize the strategic options available, determine which ones can be pursued, and the order of prioritization in the execution and implementation of your business strategy.

There are four main approaches involved in a TOWS matrix:

  • Strengths/Opportunities (SO): Consider how your company can leverage its existing strengths to capitalize on or seize growth opportunities.
  • Strengths/Threats (ST): Determine how existing internal strengths can support your organization in avoiding or countering external threats.
  • Weaknesses/Opportunities (WO): Consider how your company can eliminate or mitigate internal weaknesses by leveraging external opportunities.
  • Weaknesses/Threats (WT): Determine how your company can minimize or offset weaknesses to mitigate and counter threats.

How can you build a TOWS analysis?

  1. Build a SWOT analysis by identifying your company’s key strengths, weaknesses, opportunities and threats.
  2. Use the findings from your SWOT to identify the relationship between the internal and external factors and build actionable strategies that fall under each approach. For example, “SO strategies” can be formed by determining how to take advantage of each opportunity using your existing strengths, while “WO strategies” capitalize on the external opportunities to counter internal weaknesses.  
  3. Rank each of the items in their respective categories in order of importance, from most to least important. This will help you better visualize the strategic options available, determine which ones can be pursued, and the order of prioritization in the execution and implementation of your business strategy.

A TOWS matrix example: Apple

Here is a look at a sample TOWS matrix for Apple, focusing only on the top priority strategies:

Benefits & Limitations of TOWS

There are a number of benefits to using the TOWS strategic framework, but most notably, the tool helps link internal and external factors to determine their potential impact on your business and support in creating a strategy for competing more effectively.

Key benefits include the ability to:

  • Assess the company’s strengths and weaknesses, to determine which areas to capitalize on and which areas need more support.
  • Identify the company’s threats and opportunities by looking to external factors to determine risk mitigation strategies and identify opportunities for growth.
  • Build clear, actionable strategies based on the above to compete more effectively.

Key limitations include:

  • It can be difficult to predict the future and how both the internal and external factors will shift and be impacted by other forces, including economics and politics.
  • Conducting the analysis could be time-consuming, as identifying the external factors (threats, opportunities) requires more thorough research.
  • There may be bias or lack of clarity in ranking the factors in order of most-least important depending on who is conducting the analysis.
  • TOWS does not provide recommendations on which strategy to adopt, but rather highlights the areas to focus on/develop for strategic planning.

Where do you find the information to answer these questions and build a TOWS analysis?

While TOWS can prove to be an extremely valuable tool, results from the analysis should not be taken at face value, but rather used as a starting point in supporting your company’s competitive analysis and strategic planning efforts. In most cases, this type of analysis requires further investigation and more thorough research across different areas of your business, which can be time-consuming.

HelloInfo’s expertise and access to a rich set of information resources can support you in these efforts. If you are interested in learning more about how we can help you build a TOWS on your company, or your competitors, please schedule a call with us.

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