SWOT OR TOWS Analysis (TOWS Matrix)

Opportunities

Opportunities are the chances exist in the external environment, it depends firm whether the firm is willing to exploit the opportunities or may be they ignore the opportunities due to lack of resources.

Threats

Threats are always evil for the firm, minimum no of threats in the external environment open many doors for the firm. Maximum number of threats for the firm reduce their power in the industry.

How to identify strengths,weakness,opportunities and threats for TWOS Matrix?

Well, if you have same question them its a good one, finding strengths, weakness, opportunism and threats is deep thinking process. The best thing to do ask the decision maker,employee, strategic partners and customer as well about your good and bad points. The other way out to use some statistical and mathematical tool.In strategic management strengths and weakness are extracted from IFE matrix, opportunities and threats from EFE matrix.

Example of Wal-Mart Strengths,Weakness,Opportunities and Threats[sky]

Wal-Mart Strengths

• Customer oriented
• SAM’S Club customers able to buy in bulk
• Super centers offer one stop shopping
• Satisfaction guaranteed programs promoting customer goodwill
• Buy from local merchants when possible
• Stock ownership and profit-sharing with employees
• Leads industry in information technology
• Ongoing development of its employees
• Strong community involvement

Wal-Mart Weakness

• No formal mission statement
• Membership only for SAM’S Club
• Keep poor performing employees on hand
• Old fashioned store policies
• Few women and minorities in top management

Wal-Mart Opportunities

• Consumers want ease of shopping
• Internet shopping growing
• Dollar value increasing
• Similar shopping  patterns worldwide
• Retail sales expected to increase
• Environment conscious consumers
• Elderly population growing
• Asian market virtually untapped by retail
• European Market untapped by retail

Wal-Mart Threats

• Regulation of Wal-Mart pharmacies[linkunit]
• Small towns do not want entry of Wal-Mart
• Bad media exposure for Kathie Lee Brand
• Variety of competition nationally, regionally and locally
• Substitute products more easily because of intense competition

What type of strategies are the part of TOWS Matrix?

The SWOT Matrix is an important matching tool that helps managers develops four types of strategies:

1. SO strategies—use a firm’s internal strengths to take advantage of external opportunities.
2. WO strategies—are aimed at improving internal weaknesses by taking advantage of external opportunities.
3. ST strategies—use a firm’s strengths to avoid or reduce the impact of external threats.
4. WT strategies—are defensive tactics directed at reducing internal weaknesses and avoiding external threats.

Example of Pakistan State Oil TWOS Matrix

The above TWOS matrix show the four type of strategies, SO  strategies are developed using PSO strengths to exploit the external opportunities, WO strategies are developed to overcome weaknesses by utilizing the opportunities. ST strategies are developed by PSO to minimize or eliminate the threats using the internal strengths and last WT strategies are developed to avoid threat and minimize weaknesses.