TOWS Matrix vs. SWOT Analysis
The TOWS Matrix is an acronym for Threats, Opportunities, Weaknesses, and Strengths. It’s a variation on the SWOT Analysis, and it tries to address some of the weaknesses of the SWOT Analysis. Both can be useful to assess the market context.
Understanding a TOWS matrix
The TOWS Matrix is an acronym for Threats, Opportunities, Weaknesses, and Strengths. The matrix is a variation on the SWOT Analysis, and it seeks to address criticisms of the SWOT Analysis regarding its inability to show relationships between the various categories.The TOWS matrix was created by author and management consultant Heinz Weihrich in 1999.
While both the TOWS matrix and SWOT analysis consider the same four factors, the former is more of a strategic planning tool. It looks at the specific relationships between internal and external factors that help an organization remove weaknesses, exploit strengths, take advantage of opportunities, and reduce or remove threats.
Each relationship is represented by a 2×2 matrix with resultant strategic options occupying four quadrants:
Strengths to opportunities (SO) – the strategy with the greatest chance of success where the organization focuses on its internal strengths to “double down” on external opportunities and increase market share.Strengths to threats (ST) – the second strategy calls on the organization to consider how its internal strengths could help it avoid real or potential market threats. Weaknesses to opportunities (WO) – how can market opportunities compensate for an organization’s internal weaknesses?Weaknesses to threats (WT) – this is a defensive strategy where the organization must seek to minimize the impacts of both its internal weaknesses and external threats. In some cases, this may force the organization to question whether it has a viable business.Understanding a SWOT analysis
The SWOT analysis was created by American management consultant and businessman Albert Humphrey. The analysis is the result of a decade of work between 1960 and 1970 at Stanford University where Humphrey developed a team-based approach to planning.
The analysis can serve much like a questionnaire for each factor. For example:
Strengths – what does the organization do well? Does it own intellectual property or possess a unique skill?Opportunities – are there changes to the external environment ripe for exploitation? How can the organization take advantage of a competitor’s weakness?Weaknesses – is IP outdated? Does the workforce require extra training? Is the organization’s financial position sustainable?Threats – what threat do the competition pose? Is a change of government likely to drive up costs? What about a fluctuation in the economic cycle?The SWOT analysis is a simple but effective way for an organization to assess its strengths, weaknesses, opportunities, and threats. Unlike the TOWS matrix, however, it does not clarify how a strength may be maximized or a weakness avoided. As a result, it is often used in conjunction with another analysis.
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