The TOWS matrix

The TOWS Matrix is derived from the SWOT Analysis model, which stands for the internal Strengths
and Weaknesses of an organization 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 Weihrich.

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 organization and the external Opportunities and Threats that the business is
confronted with.

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 organization 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 organization
to make decisions better, seize opportunities and protect itself better against threats

Strategic options

The TOWS Matrix helps businesses to identify their strategic options. An organization 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 organization learns to carefully look for market opportunities and
recognize 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 organization and what opportunities and threats there are in its environment. It
forces organizations 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.

External environment
The TOWS Matrix is not just meant for the highest levels of management in an organization. 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 emphasizes the external environment.

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:
 1. Internal Strengths and External Opportunities (S-O) – how can they use the strengths to benefit
from existing external opportunities?
2. Internal Strengths and External Threats (S-T) – how can they benefit from their strengths to
avoid or lessen (potential) external threats?
3. Internal Weaknesses and External Opportunities (W-O) – how can they use opportunities to
overcome the organization’s internal weaknesses?
4. Internal Weaknesses and External Threats (W-T) – how can they minimize 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:

1 External:

Threat – Increasing competition from cheaper Polish workers.

Opportunity – Strong desire from vocational educators for partnerships with organizations for
apprenticeship positions.

2 Internal:

Weakness – The organization 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 organization
who have a lot of expertise.

Strategies
The above-mentioned factors can be linked to each other, leading to strategies:

S-O – How can the organization employ the expertise of its own professionals to respond to the needs of
vocational education center’s ? By partnering up, the organization can convince the vocational education
Centre’s 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 organization use its skilled staff to compete with cheaper workers employed by
competitors? A smart approach for the organization 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 centers help the organization to improve itself
and put more effort into customer acquisition? By presenting itself as an accredited apprenticeship
provider, the organization 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 organization better position itself in the market and thus reduce the threat posed by
competitors? By presenting itself as an accredited apprenticeship provider, the organization 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.

2
Strategic position & action evaluation matrix (SPACE)
Strategic Position and Action Evaluation Matrix (SPACE) is “an approach to hammer out an
appropriate strategic posture for a firm and its individual business.” SPACE is an analysis of the
following four dimensions in as in a two-dimensional portfolio analysis and involves a consideration of:
Company’s competitive advantage.

What is the SPACE Analysis?

A SPACE Analysis makes it easier for upper management to make strategic choices and decisions and
create a plan. SPACE is an acronym of Strategy, Position, Action, and Evaluation. Organizations’
external and internal environments play a major role in the SPACE Analysis. In general, the analysis is
represented in a matrix. The top of the Y-axis says ‘Financial Strength’ (FS), and the bottom of the Y-
axis shows ‘Environmental Stability’ (ES). The left of the X-axis shows the Competitive Advantage
(CA), and Industry Attractiveness (IA) is shown on the right. Combined this leads to four positions;
conservative, aggressive, defensive, and competitive. The SPACE Analysis can then lead to creative
ideas with an appropriate corporate strategy.

Strategic Position and Action Evaluation Matrix (SPACE) is “an approach to hammer out an appropriate
strategic posture for a firm and its individual business.” SPACE is an analysis of the following four
dimensions in as in a two-dimensional portfolio analysis and involves a consideration of:

 Company’s competitive advantage

 Company’s financial strength
 Industry strength
 Environmental stability

3
Boston consulting group matrix
Boston Consulting Group (BCG) is an American management consulting firm founded in 1963. The
firm has more than 90 offices in 50 countries, and its current CEO is Rich Lesser. BCG is one of the
three biggest employers in management consulting, known as MBB or the Big Three. BCG alumni hold
many top management positions in the world economy.

History The firm was founded by Bruce Henderson in 1963 as part of The Boston Safe Deposit and
Trust Company. Henderson had previously been employed at Arthur D. Little. In 1973, Bill Bain and
others left BCG to form Bain & Company. In 1974, Henderson arranged an employee stock ownership
plan so that the employees could make the company independent from The Boston Safe Deposit and
Trust Company. The buyout of all shares was completed in 1979.
As part of the federal government's auto bailout program, Boston Consulting Group was paid as much as
$7 million to advise General Motors and Chrysler to help costs and overhaul operations.

In January 2020, long-time BCG director Lisa Ellis-James left the consultancy to join Ogletree Deakins
as COO.

Recruiting BCG typically hires for an associate or a consultant position, recruiting from top
undergraduate colleges and business schools. The firm also offers summer internships.

Insiders estimate that BCG North American offices receive around 10,000 resumes every year for the
associate position.

Senior associates have the opportunity to work abroad through BCG's exchange program. Many
associates are also sponsored by the firm to attend business school. As is typical for the top strategy
consultancies, BCG practices an "up or out," or forced attrition, system, in which employees must leave
the company if they fail to achieve a promotion within a fixed time frame.

BCG growth-share matrix

In the 1970s, BCG created and popularized the "growth–share matrix," a chart to help large corporations
decide how to allocate cash among their business units. The corporation would categorize its business
units as "Stars," "Cash Cows," "Question Marks," or "Dogs," and then allocate cash accordingly,
moving money from Cash Cows toward Stars and Question Marks, which have higher market growth
rates and hence greater upside potential.

4
Grand strategic matrix
Grand strategy or high strategy comprises the "purposeful employment of all instruments of power
available to a security community".[1] Issues of grand strategy typically include the choice of primary
versus secondary theaters in war, distribution of resources among the various services, the general types
of armaments manufacturing to favor, and which international alliances best suit national goals. With
considerable overlap with foreign policy, grand strategy focuses primarily on the military implications
of policy. A country's political leadership typically directs grand strategy with input from the most
senior military officials. Development of a nation's grand strategy may extend across many years or
even multiple generations.

The concept of grand strategy has been extended to describe multi-tiered strategies in general, including
strategic thinking at the level of corporations and political parties. In business, a grand strategy is a
general term for a broad statement of strategic action. A grand strategy states the means that will be used
to achieve long-term objectives. Examples of business grand strategies that can be customized for a
specific firm include: market concentration, market development, product development, innovation,
horizontal integration, divestiture, and liquidation.

Grand strategy expands on the traditional idea of strategy in three ways

expanding strategy beyond military means to include diplomatic, financial, economic, informational, etc.
means
examining internal in addition to external forces – taking into account both the various instruments of
power and the internal policies necessary for their implementation (conscription, for example)

including consideration of periods of peacetime in addition to wartime.

World War II

An example of modern grand strategy is the decision of the Allies in World War II to concentrate on the
defeat of Germany first. The decision, a joint agreement made after the attack on Pearl Harbor (1941)
had drawn the US into the war, was a sensible one in that Germany was the most powerful member of
the Axis, and directly threatened the existence of the United Kingdom and the Soviet Union.

Cold War

The US and the UK used a policy of containment as part of their grand strategy during the Cold War.
The conversation around grand strategy in the United States has evolved significantly since the country's
founding, with the nation shifting from a strategy of continental expansion, isolation from European
conflicts, and opposition to European empires in the Western hemisphere in its first century,[11] to a
major debate about the acquisition of an empire in the 1890s (culminating in the conquest of the
Philippines and Cuba during the Spanish–American War),[12] followed by rapid shifts between offshore
balancing, liberal internationalism, and isolationism around the world wars.

In the 1990s

The end of the Cold War and the collapse of the Soviet Union removed the focal point of U.S. strategy:
containing the Soviet Union. A major debate emerged about the future direction of U.S. foreign policy.
In a 1997 piece for International Security entitled "Competing Visions for U.S. Grand Strategy," Barry
R. Posen and Andrew L. Ross identified four major grand strategic alternatives in the debate:[14]

 neo-isolationism
 selective engagement
 cooperative security
 primacy

Neo-isolationism
Stemming from a defensive realist understanding of international politics, what the authors call "neo-
isolationism" advocates the United States remove itself from active participation in international politics in
order to maintain its national security. It holds that because there are no threats to the American homeland,
the United States does not need to intervene abroad.
Selective engagement
With similar roots in the realist tradition of international relations, selective engagement advocates that the
United States should intervene in regions of the world only if they directly affect its security and prosperity.
Cooperative security
The authors write "the most important distinguishing feature of cooperative security is the proposition that
peace is effectively indivisible." The authors imagine that such a grand strategy would involve stronger
support for international institutions, agreements, and the frequent use of force for humanitarian purposes.
Primacy
'Primacy holds that only a preponderance of U.S. power ensures peace .As a result, it advocates that the
united States pursue ultimate hegemony and dominate the international system economically, politically and
militarily, rejecting any return to bipolarity or multi polarity and preventing the emergence of any peer
competitor.

5
Quantitative strategic planning matrix (QSPM)
Quantitative Strategic Planning Matrix (QSPM) The Quantitative Strategic Planning Matrix is a strategic
tool which is used to evaluate alternative set of strategies. The QSPM incorporate earlier stage details in
an organize way to calculate the score of multiple strategies in order to find the best match strategy for
the organization.

Decision stage is the last stage of strategy formulation in which a tool is used called Quantitative
Strategic Planning Matrix or QASM Matrix. There are a number of alternative strategies and the
Quantitative Strategic Planning Matrix (QSPM) can be used to objectively evaluate the most suitable
strategy among the list of all the alternative strategies. The data is collected and a matrix is developed by
using quantitative method for strategic planning. The identification of the external & internal crucial
success factor is regarded as the basis of QSPM Matrix.

Steps in Preparation of Quantitative Strategic Planning Matrix

Following are some of the steps of preparation of QSPM matrix.

1. In the left column of the Quantitative Strategic Planning Matrix (QSPM)

2. In the left column of the Quantitative Strategic Planning Matrix (QSPM) key external
opportunities & threats & internal strengths & weaknesses are listed
3. Each key internal & external factor has assigned by certain weight
4. The matching matrices stage 2 is examined so that alternative strategies are identified in order to
consider the implementing decision.
5. The Attractiveness Scores (AS) are determined
6. The Total Attractiveness Scores are computed
7. The Sum Total Attractiveness Score is computed

Limitations:

Following are some of the limitations of the Quantitative Strategic Planning Matrix (QSPM)

 Intuitive judgments & educated assumptions are required.

 The effectiveness of the QSPM depends on the prerequisite inputs from previous stages
 Only those strategies are evaluated that are related to one another in a given set

Advantages of QSPM Matrix:

Following are some of the advantages of the QSPM matrix.

1. Consideration of set of strategies is made in a sequential or simultaneous manner

2. The relevant internal & external factors are integrated in the decision making process..