Topic 3 TOWS Matrix Flashcards
9 cells matrix is called
TOWS MATRIX
Strategic Options Using TOWS
Four sets of strategic options may be generated from the matrix.
True or False
True
These are called “maxi-maxi” strategies because they maximize strengths by maximizing opportunities.
S-O Strategies
They are considered offensive strategies as they are used to pursue competitive advantages in the market.
S-O Strategies
An example of this would be when a company possesses exceptional skills in online advertising (strength) and an observed opportunity is that a large portion of the market responds to online advertising (opportunity). Combining these factors, the company may develop an online advertising campaign to maximize sales of products online.
S-O Strategies Example
With reference to the types of strategies in Topic 2 of Module 4, this strategic option may fall under MARKET PENETRATION if the company already sells online, or may be MARKET DEVELOPMENT if the company has not started selling on this platform.
S-O Strategies
The combination of strengths and threats, which are also known as “maxi-mini” strategies.
S-T Strategies
These are also considered offensive strategies because of the use of strengths in pursuing competitive advantages over rivals.
S-T Strategies
To use this, let’s say, with the expertise in online advertising (strength), a company may be able to address the threat of pandemic to selling in physical stores (threat). This strategy may be classified as market development under types of strategies.
S-T Strategies Example
Otherwise known as “MINI-MAXI” strategies, these are defensive strategies designed to minimize weaknesses by maximizing opportunities.
W-O Strategies
An example would be when the company has declining sales in physical stores (weakness) and there is the presence of an online market (opportunity). Here the strategic option would be to shift to the online market or to offer the products online. This strategy is considered a MARKET DEVELOPMENT approach as there is a change in the market explored.
W-O STRATEGIES
These strategies are considered to be the MOST DEFENSIVE of all set of strategic options since the goal in using them is to minimize weaknesses and minimize threats, thus the name “mini-mini” strategies.
W-T STRATEGIES
Specifically, to accomplish this, the weakness should be converted into a strength to be able to minimize the impact of the threat.
These strategies are resorted to when the company is suffering from a weak competitive position or bad performance.
W-T STRATEGIES
An example would be when a company is losing profits due to poor distribution (weakness) and then there are stronger competitors with established distribution networks (threat). To address this situation, the losing company may consider entering into a joint venture with a strong distribution company to bring its products to the market.
W-T STRATEGIES Example
Steps in preparing a TOWS Matrix
Let us draw our process from what we have just done for the TOWS analysis:
First, list opportunities and threats. This should be lifted from the SWOT, STEEP and Five-Forces Framework analyses done under external scanning.
Second, list strengths and weaknesses. This is from our internal SWOT analysis and the 7S Framework of internal scanning.
Third, identify possible combinations from the list of factors.
Fourth, write down the strategic options based on their categories in the four cells of the TOWS matrix.
Lastly, identify the type of strategy you have created in the matrix.
TOWS Step
