This article describes the TOWS Matrix, developed by Heinz Weihrich in a practical way. After reading you will understand the basics of this powerful strategy tool. This article also contains a downloadable and editable TOWS Matrix template.
What is the TOWS Matrix?
The TOWS Matrix is derived from the SWOT Analysis model, which stands for the internal Strengths and Weaknesses of an organisation and the external Opportunities and Threats that the business is confronted with.
The acronym TOWS is a variant of this and was developed by the American international business professor Heinz Weirich.
The TOWS Matrix is aimed at developing strategic options from an external-internal analysis and is a practical tool, particularly in the fields of business administration and marketing.
The other way around
Whereas SWOT Analysis starts with an internal analysis, the TOWS Matrix starts the other way around, with an external environment analysis; the threats and opportunities are examined first.
From that standpoint, an organisation gets a clear picture of its environment and the opportunity to think about strategy and what direction the company will go in. Next the company’s strengths and weaknesses are considered; what it’s good at internally and what it’s not so good at.
The external analysis is linked to the analysis and the resulting TOWS Matrix can help an organisation to make decisions better, seize opportunities and protect itself better against threats.
The TOWS Matrix helps businesses to identify their strategic options. An organisation gets the opportunity to make the most of its strengths and get around its internal weaknesses and learn to deal with them properly. Externally, an organisation learns to carefully look for market opportunities and recognise possibilities. And they learn how to control and overcome potential threats.
The TOWS Matrix can also help with brainstorming and developing great ideas to generate effective marketing strategies and tactics. Furthermore, the model goes beyond merely finding out the strengths and weaknesses within an organisation and what opportunities and threats there are in its environment. It forces organisations to really think about how they can improve themselves, how they can guard against threats and become more aware of their expertise and potential shortcomings.
The TOWS Matrix is not just meant for the highest levels of management in an organisation. It can be a very useful tool for departments (i.e. a marketing or sales team) or for individual employees on an operational level. Once it’s employee’s or a department’s strengths are known, these can be improved further to become even better. The TOWS Matrix emphasises the external environment.
It starts by analysing external opportunities and threats. Up next are the internal strengths and weaknesses, which will subsequently be linked to the external analysis. And this is where it goes a step beyond the traditional SWOT Analysis; strategic tactics emerge by opposing S-O (Strengths-Opportunities), W-O (Weaknesses-Opportunities), S-T (Strengths-Threats) and W-T (Weaknesses-Threats).
A next step in the analysis helps when thinking about the option they want to pursue. Here the external opportunities and threats are compared to the internal strengths and weaknesses to help identify strategic options:
- Internal Strengths and External Opportunities (S-O) – how can they use the strengths to benefit from existing external opportunities?
- Internal Strengths and External Threats (S-T) – how can they benefit from their strengths to avoid or lessen (potential) external threats?
- Internal Weaknesses and External Opportunities (W-O) – how can they use opportunities to overcome the organisation’s internal weaknesses?
- Internal Weaknesses and External Threats (W-T) – how can they minimise weaknesses and thus avoid potential threats?
TOWS Matrix example
In this example, we look at a medium-sized maintenance and painting business that mostly works for large housing co-operatives and offices. As per the TOWS matrix, threats and opportunities are looked at first, followed by the internal weaknesses and strengths:
Threat – Increasing competition from cheaper Polish workers.
Opportunity – Strong desire from vocational educators for partnerships with organisations for apprenticeship positions.
Weakness – The organisation takes little initiative when it comes to customer acquisition and waits for customers to come to them.
Strength – There is a large group of very experienced professionals working within the organisation who have a lot of expertise.
The above-mentioned factors can be linked to each other, leading to strategies:
S-O – How can the organisation employ the expertise of its own professionals to respond to the needs of vocational education centres? By partnering up, the organisation can convince the vocational education centres that there is enough capacity, knowledge and experience to train young people to independent professionals at all levels of vocational education.
S-T – How can the organisation use its skilled staff to compete with cheaper workers employed by competitors? A smart approach for the organisation would be to communicate to the outside world that their staff has accredited diplomas and that it’s important for housing co-operatives to comply with legal requirements and safety standards.
W-O – How can partnerships with vocational education centres help the organisation to improve itself and put more effort into customer acquisition? By presenting itself as an accredited apprenticeship provider, the organisation will put itself on the market again and its shows that adapt to changing times and wants to offer different kinds of maintenance to businesses and housing co-operatives.
W-T – How can the organisation better position itself in the market and thus reduce the threat posed by competitors? By presenting itself as an accredited apprenticeship provider, the organisation can claim that they are a serious competitor and can possibly offer maintenance services by apprentices at reduced rates, with the work still being done by an accredited company.
The example above shows that the TOWS Matrix is particularly relevant for marketing and external communication through public relations. That way, the organisation can position itself in the market better and work on its image.
TOWS Matrix template
Start describing strategic options by conducting an external-internal analysis with this ready to use TOWS Matrix template.
It’s Your Turn
What do you think? How can you apply the TOWS Matrix in today’s modern business world? Do you recognize the practical explanation or do you have more additions? What are your success factors for setting up a TOWS Matrix?
Share your experience and knowledge in the comments box below.
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- Weihrich, H. (1982). The TOWS matrix – A tool for situational analysis. Long range planning, 15(2), 54-66.
- Dyson, R. G. (2004). Strategic development and SWOT analysis at the University of Warwick. European journal of operational research, 152(3), 631-640.
- Proctor, T. (2008). Strategic Marketing, an introduction. Taylor & Francis Ltd.
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