TOWS Matrix: Your Guide to Strategic Planning

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Town Matrix creation by Heinz Weihrich, also known as an extension of SWOT Analysis by Albert Humphrey.

If you notice closely, you will see that SWOT and TOWS are acronyms. Both tools get used to refine the business or department strategy. 

TOWS is like the next step in understanding business strategy after understanding SWOT.

Understanding the TOWS matrix and its importance for any business is important for each growing and fully developed company.

The article will cover all the basics and in-depth information about TOWS Matrix and its workings.

What Is TOWS Matrix

Heinz Weihrich is a well-known management consultant who became more popular after founding TOWS Matrix. 

He analyzes that SWOT becomes a successful analysis, focusing on opportunities, threats, strengths, and weaknesses. 

Conversely, the TOWS matrix focuses more on the more helpful graphical representation of a SWOT analysis.

The TOWS mainly focuses on contrasting internal strengths or weaknesses and, on the other side, with some external opportunities or threats. 

Every fact can impact each other’s work. The analysis helps you understand your strategic choices better. 

Questions like “How can we make our strength stronger? Or how can we make threats disappear by following the TOWS Matrix?

TOWS Matrix Strategy Combinations

Opportunities and Strengths

Businesses should assess their strengths in different cases, so they can determine which strengths to use in different opportunities. 

The strength of any organization or business can open lots of opportunities in different areas for them.

Example: If a car manufacturer is considering joining a huge luxury car market, which is an opportunity for them with their strong R&D strength, it can be a beneficial choice.

Strengths and Threats:

Every organization must assess its strengths based on its ability to avoid external problems or threats. The more strength can face external threats, the more it becomes a powerful strength for a business or any company.

Example: Unfavorable rates can threaten the car manufacturing business, but their expertise in R & D can increase their value.

Opportunities and Weaknesses

Organizations should know how external opportunities can remove their weaknesses. 

Weaknesses become strong when business owners don’t know about their external opportunities, which the TOWS Matrix helps them understand.

Example: The unionization of foreign labor can become a weakness, but hiring some managers with good experience in the relevant field is an external solution to the problem.

Weaknesses and Threats:

Businesses or organizations assess their threats and weaknesses to find the perfect way to avoid them. Knowing wekanes and threst hesp to undtensd the solution of aprobelm.

Example: If someone is entering a foreign market with little experience, it is a weakness for them, but this can be avoided by entering the market together.

Examples of the TOWS Matrix

Apple TOWS Matrix

 Stegnth:

  • Apple provides the best and highest-standard services and products, which makes people trust them easily.
  • Apple has a very strong image as a brand.
  • The company’s financial strength is very strong, with high profitability and high liquidity. The supply chain provided by the company is innovative and very experienced.
  • Apple has premium quality products, which guarantee high sales. They have a base of loyal customers with a margin of high profit.

 Weakness:

  • Apple doesn’t aim to compete with any other brands, and the price of its products is very high.
  • The range of the company’s products is small.
  • Apple’s services and products are exclusive, which means they are non-compatible.

Opportunities:

The demand for new smartphones and electric gadgets is increasing in the market, and people are focusing on product quality rather than price.

Threats:

  • Apple’s competitors are making their businesses grow daily, and it has become more challenging for Apple.
  • The cost of manufacturing is rising with time.
  • Sales of personal computers get low, which can affect the sale of apples.

Nestle TOWS Matrix:

 Strength:

  • Nestle has a very big supply network with distribution all over the country.
  • The low-cost structure of a company makes the product’s cost affordable for people.
  •  Big assets base gives Nestle good solvency.
  • The company has huge profit reserves when it comes to financing capital expenditures.

Weakness:

  • Many big industries invest in their development and research, which Nestle does in small amounts.
  • The high cost of inventory
  • Cash flow problems
  • The organization is currently facing a high turnover of many employees.

Opportunities:

  • Organizations can use different technologies to automate their operations, reducing costs.
  • Nestle has the power to use social media to tap into e-commerce.
  • If the population increases, the demand for milk products goes up automatically.

Threats

  • Competitors with more technological advantages are coming as a threat to Nestle.
  • The increasing barging power of the suppliers has added to the costs.
  • Consumers’ tastes change with time, which automatically puts pressure on an organization.

Amazon TOWS Matrix:

Strength:

  • Amazon can easily expand into markets, even new ones.
  • Promote brand equity and use attractive technology.

Weakness:

  • Poor Performance in China
  • Amazon relies on the market in North America, and they spend a lot on shipping.

Opportunity:

  • Amazon Go stores are increasing.
  • Amazon is thinking about cross-border e-commerce with advertising services in China.

Threats:

  •  Compioters are inasing in amrekt
  • Amazon’s commitment to convenient and fast delivery costs money in the United States.

Advantages of the TOWS Matrix

These are some benefits that businesses and organizations get by using TOWS Matrix:-

  • The TOWS Matrix helps learn about strategic ideas by connecting any business’s internal and external facts. It’s a versatile option compared to others, which includes many time-consuming brainstorming sessions.
  • TOWS Matrix is designed for easy understanding, so anyone with no special skills or training can also understand TOWS.
  • It’s a user-friendly technique that helps increase the employee’s cohesiveness with a focus on organization.
  • TOWS is not made for any specific company or economy. It can be easily applied to different organizations and economies. It can help any company to upgrade its dynamics and strategies to make itself better than its competitors.
  • Many analytical techniques focus only on the positive or, more commonly, on the negative. TOWN Analyze focuses on both positive and negative aspects. The result of this technique is more helpful than it costs, making the technology better for some businesses currently on the market.

Limitations of the TOWS Matrix

  • TOWS is very broad when it comes to making decisions from it. The TOWS does not have any way to help determine the weight of any important or risky element contained.
  • Other frameworks get completed in a short time, but TOWS takes a longer period than others. Understanding internal and external problems is important for using the TOWS.
  • TOWS does not offer any help when it comes to establishing priorities. The input of hardworking individuals is necessary to make your decision work.

TOWS Matrix Steps You Can’t-Miss

These are some simple steps that you can follow to use TOWS Matrix: –

First step: SWOT analysis

SWOT Analysis was created before TOWS Matrix. Understanding SWOT is the first step to understanding how TOWS functions properly. 

This process will help you identify your weaknesses and strengths. It also helps in identifying the opportunities and threats you are looking for. 

Analyze the SWOT and TOWS relationships and write them down on any sheet.

Second step: Translate the finding with the help of the TOWS Matrix:

Now add the conclusion on a new sheet that you get after analyzing TOWS and SWOT. It helps you make a better plan so you can do everything statistically. 

Translate all your findings using TOWS.

Third Step: Assess and link strategic options:

Now, think about internal and external factors in combination and how you can benefit from them. For example:-

  • Stregnthes with Thretas: Find out how to use your strengths to avoid or overcome your biggest threats.
  • Opportunities with weakness: Find out how you will use your opportunity to make your weaknesses disappear.
  • Weakness with Threats: Plan to whom you can make your threats and weaknesses as much as possible.
  • Strengths with opportunities: Try to take advantage of your strengths so they can bring you opportunities.

Fourth Step: Assess strategic options

Now evaluate all the options you created and see which ones benefit your origination. Find out the options that can help you achieve something. 

Add all your chosen options to that strategic option that can strengthen your business.

What Are The Things To Remember Before Starting Tows Matrix?

Many people have never heard of the TOWS, but they know the SWOT word and its function well. The TOWS outcome is more beneficial than the SWOT outcome. 

Do these simple things before starting to apply the TOWS in your organization:-

  • Gather some feedback from your customer. It does not matter if the feedback is good or bad. Grab the genuine ones. Know how your current relationship with the customer is going.
  • Talking with someone who will contribute equally to your progress journey is important. Share your ideas with your employees and listen to their thoughts about them.
  • TOWS is like an internal tool, so always be honest and factual when using the TOWS Matrix. The study of the sale you get does not matter if it is good or bad.
  • Keep informed about your industry’s latest news or your competitors’ activities. Search for M & A in the market.

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