Background

The TOWS Analysis was described in 1999 by Heinz Weihrich, a professor of Global Management and Behavioral Theory at the University of San Francisco. A TOWS analysis is the strategic application of a SWOT analysis. We start with a brief look at the SWOT analysis.

About the model

When we analyze the company's current situation, we use the SWOT analysis. SWOT is the abbreviation for 4 areas that we examine. See the video about the SWOT analysis on Flixabout.com, where this figure comes from.

The abbreviations come from the English terms:

Strengths - strengths. Here we look at the strengths that are internal to the company. That is, the strong side of the organization itself.

Weaknesses - weaknesses. Here we look at the weaknesses that are internal to the company and areas where the company can work on becoming stronger.

SW in the SWOT analysis is about the internal conditions in a company.

Opportunities - opportunities. Here we look at the opportunities that lie in the company's surroundings. It is a clarification of what untapped opportunities there are that the company can take advantage of. It could be new trends among consumers, economic progress or something else.

Threats – threats. Here we look at the threats that exist in the company's environment. These could be threats from competitors, changing exchange rates, recession or other things.

OT in SWOT are external conditions and things that happen in the company's surroundings and that it cannot do anything about. However, the company should know these external conditions to adapt and manage to avoid any dangers and exploit the opportunities that may be.

Based on the SWOT analysis, the company can turn the model into a TOWS analysis. 

This gives us SWOT in TOWS:

On the internal side we have Strengths and weaknesses. That is, strengths and weaknesses

On the external side we have opportunities and threats. That is, opportunities and threats.

In the 4 middle fields we have the TOWS fields themselves, which connect the pages in SWOT to strategic initiatives.

SO strategies which are formed by strengths and opportunities. That is, Strengths and opportunities.

WO strategies which are formed by weaknesses and opportunities - that is, weaknesses and opportunities.

ST strategies which are formed by Strengths and threats - that is, strengths and threats.

WT strategies are formed by weaknesses and threats.

This gives us the 4 TOWS strategies:

SO strategies

WO strategies

ST strategies

WT strategies

And the TOWS analysis becomes an operational analysis, which looks at the strategic initiatives that the company can take based on the knowledge contained in the SWOT analysis. 

Criticism of the model

TOWS is a tool that helps management take strategic initiatives. But as with other theoretical models, TOWS model does not tell us anything about what is the right thing to do. Here, management must assess the situation. Sometimes things go well – other times the wrong decisions are made in the companies.