PROFESSIONAL ETHICS & DECISION MAKING

Module 4: TOWS
The TOWS analysis is often used as a follow-up to the SWOT analysis, which identifies an
organization's internal strengths and weaknesses, as well as external opportunities and threats.
The SWOT analysis helps organizations to identify and prioritize their strategic goals and
objectives. However, it does not provide specific recommendations on how to achieve these
goals. The TOWS analysis, on the other hand, provides a more detailed analysis of the strategic
options available to the organization.

To conduct a TOWS analysis, you need to start by identifying the strengths and weaknesses of
the organization. Strengths are the internal capabilities and resources that give the organization
a competitive advantage over its competitors. Weaknesses are areas where the organization is at
a disadvantage compared to its competitors. These internal factors can be identified through a
variety of methods, including internal audits, customer feedback, and employee surveys.

Next, you need to identify the

external opportunities and threats
facing the organization.
Opportunities are external factors
that the organization can exploit to
achieve its strategic goals. These
might include new markets,
emerging technologies, or changes
in regulations. Threats are external
factors that could negatively
impact the organization's ability to
achieve its goals. These might
include increased competition,
changes in consumer preferences,
or economic downturns.

Once you have identified these

factors, you can use a TOWS matrix
to match the organization's strengths and weaknesses with the opportunities and threats.

The TOWS matrix is a four-quadrant table that maps the internal factors against the external
factors. The four quadrants are:

1. SO (Strengths/Opportunities) - strategies that leverage the organization's strengths to

capitalize on opportunities.

2. WO (Weaknesses/Opportunities) - strategies that address the organization's weaknesses

in order to capitalize on opportunities.

3. ST (Strengths/Threats) - strategies that leverage the organization's strengths to mitigate

threats.

4. WT (Weaknesses/Threats) - strategies that address the organization's weaknesses in

order to mitigate threats.

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Strategies for each TOWS quadrant

Here are some possible strategies for each of the four TOWS quadrants:

1) Strengths-Opportunities (SO) Strategies:

The Strengths-Opportunities (SO) strategy in TOWS analysis aims to maximize both

strengths and external opportunities, also known as the "maxi-max" strategy. Every
company strives to be in a position where it can leverage its strengths and resources to
take advantage of external opportunities. Successful enterprises, even if they initially
adopt one of the other TOWS strategies, will attempt to transition into a position where
they can work from their strengths to take advantage of opportunities. This means that
they will strive to overcome any weaknesses they have, turning them into strengths, and
cope with any external threats to allow themselves to focus on opportunities. The
ultimate goal of the SO strategy is to maximize the company's potential and achieve
sustainable growth by leveraging its strengths and external opportunities.

Example: If a company has a strong brand reputation and a growing market for eco-
friendly products, it can develop and market a new eco-friendly product line under its
existing brand to capitalize on the growing demand.

2) Strengths-Threats (ST) Strategies:

The Strengths-Threats (ST) strategy in TOWS analysis aims to maximize the

organization's strengths while minimizing external threats, also known as the "maxi-min"
strategy. It is based on the idea that a strong organization can leverage its unique
strengths to overcome potential threats in the environment. The goal of the ST strategy
is to maximize the potential of the organization's strengths while minimizing the
negative impact of external threats. However, it's important to note that having
strengths alone may not be enough to overcome all external threats. A strong
organization may not be able to meet all external threats head-on, but by leveraging its
strengths, it can minimize the impact of these threats and continue to thrive. The ST
strategy is all about identifying the organization's unique strengths and using them to
address external threats while minimizing their negative impact.

Example: If a company has strong distribution channels and is facing intense competition
from new players, it can focus on maintaining customer loyalty and delivering
exceptional customer service through its distribution channels to differentiate itself from
competitors.

3) Weaknesses-Opportunities (WO) Strategies:

The Weaknesses-Opportunities (WO) strategy in TOWS analysis aims to minimize

weaknesses while maximizing opportunities, also known as the "mini-max" strategy. A
company may identify opportunities in the external environment but have internal
weaknesses that prevent it from taking advantage of them. For example, the company
may lack the required skills or technology in certain areas. One possible strategy to
address this weakness would be to cooperate with another firm that has the required
competencies in that field. Another approach would be to hire and train individuals with
the necessary technical capabilities to overcome the weakness. Alternatively, the

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company may choose to do nothing, leaving the opportunity for competitors to take
advantage of. The goal of the WO strategy is to minimize weaknesses while maximizing
opportunities to enable the organization to move towards a more positive position.

Example: If a company has weak supply chain management and there is a growing
demand for online shopping, it can invest in improving its supply chain to support an
online shopping platform and capture a share of the growing market.

4) Weaknesses-Threats (WT) Strategies:

The Weaknesses-Threats (WT) strategy in TOWS analysis aims to minimize both internal
weaknesses and external threats, also known as the "mini-min" strategy. When an
organization is faced with external threats and internal weaknesses, it may be in a
vulnerable position. In extreme cases, the organization may have to fight for its survival
or even consider liquidation. However, there are other choices available to such an
organization. For example, it may choose to merge with another company or cut back its
operations to either overcome its weaknesses or hope that the threats will diminish over
time. It's important to note that whatever strategy the organization chooses, the WT
position is one that any firm would want to avoid. The goal of the WT strategy is to
minimize the negative impact of both internal weaknesses and external threats to keep
the organization afloat and enable it to move towards a more positive position in the
future.

Example: If a company has weak financial management and is facing an economic

downturn, it can focus on improving its financial management and cutting costs to
maintain profitability during the tough times.

It's important to note that these are just examples, and the specific strategies adopted will
depend on the organization's unique strengths, weaknesses, opportunities, and threats. The
TOWS analysis can help organizations identify the most appropriate strategies and develop a
concrete plan of action to achieve their objectives.

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Step by Step process

Here is a step-by-step guide to conducting a TOWS analysis:

1) Define the objective: Before starting the analysis, you should define the objective of the
analysis. This could be to develop a new strategic plan, evaluate the effectiveness of an
existing strategy, or identify new growth opportunities, among others.

2) Conduct a SWOT analysis: The TOWS analysis is built on the foundation of a SWOT
analysis. Therefore, conduct a SWOT analysis to identify the organization's internal
strengths and weaknesses, as well as external opportunities and threats.

3) Prioritize the factors: Once you have identified the factors from the SWOT analysis,
prioritize them based on their importance and impact on the organization. This will help
you focus on the most critical factors during the TOWS analysis.

4) Create a TOWS matrix: Create a TOWS matrix by dividing a sheet of paper or a

whiteboard into four quadrants. Label the top row as "Opportunities" and "Threats" and
the left column as "Strengths" and "Weaknesses".

5) Match the internal factors with external factors: Fill in the quadrants by matching the
organization's strengths with external opportunities, weaknesses with external
opportunities, strengths with external threats, and weaknesses with external threats.
This will generate four strategic options for the organization.

6) Generate strategic options: Develop specific strategies for each of the four quadrants.
For example, if the organization's strength is its strong brand and there is an opportunity
to enter a new market, the strategy could be to leverage the strong brand to enter the
new market. Similarly, if the organization's weakness is a lack of digital capabilities and
there is an opportunity to serve customers through digital channels, the strategy could
be to invest in developing digital capabilities.

7) Evaluate the options: Evaluate each of the strategies based on its feasibility, potential
impact, and alignment with the organization's objectives. This will help prioritize the
options and select the most appropriate strategy.

8) Develop an action plan: Once the strategy has been selected, develop an action plan that
outlines the specific steps, resources, and timelines needed to implement the strategy.
Assign responsibilities to team members and establish a system for tracking progress
and measuring success.

By following these steps, you can conduct a TOWS analysis that identifies strategic options for
the organization and develops a concrete plan of action to achieve its objectives.

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Common Mistakes in TOWS analysis

Here are some common mistakes that can occur during a TOWS analysis:

1) Incomplete or inaccurate SWOT analysis: A TOWS analysis relies heavily on the

information gathered from the SWOT analysis. Therefore, if the SWOT analysis is
incomplete or inaccurate, the TOWS analysis will also be flawed.

2) Overemphasizing internal factors: TOWS analysis requires matching internal strengths

and weaknesses with external opportunities and threats. However, some analysts may
overemphasize internal factors and neglect external factors, leading to a limited or
incomplete analysis.

3) Focusing too much on threats: While threats are an important aspect of the analysis,
focusing too much on threats can lead to a defensive strategy that ignores potential
opportunities.

4) Neglecting implementation: It's easy to get caught up in the analysis and strategy
development phase, but neglecting the implementation phase can lead to a failure to
achieve the desired outcomes. It's important to develop a concrete action plan and
assign responsibilities to team members.

5) Relying solely on the TOWS matrix: The TOWS matrix is a useful tool, but it should not be
the only tool used in the analysis. Other tools and techniques, such as scenario planning
and market research, can provide additional insights and help validate the findings from
the TOWS analysis.

6) Ignoring stakeholder perspectives: A TOWS analysis is most effective when it

incorporates the perspectives of a variety of stakeholders. Ignoring stakeholder
perspectives can lead to a limited or biased analysis that overlooks important factors and
insights.

By avoiding these common mistakes, you can conduct a more effective TOWS analysis that
produces actionable insights and informs strategic decision-making.

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Case: TOWS for Coca Cola Company

The Coca-Cola Company is a multinational corporation and one of the world's largest beverage
companies, with over 500 brands and products sold in more than 200 countries. Founded in
1886, Coca-Cola is best known for its flagship product, Coca-Cola Classic, a carbonated soft drink
that has become a cultural icon. In addition to soft drinks, the company produces and markets a
wide range of non-alcoholic beverages, including juices, waters, teas, and sports drinks, and has
also expanded into the snack and energy drink markets. With a strong emphasis on marketing
and brand recognition, Coca-Cola is widely recognized as one of the most successful and valuable
brands in the world.

Strengths:
• Strong brand recognition and brand loyalty

• Diversified product portfolio with a wide range of beverage offerings

• Global distribution network and supply chain

• High level of advertising and marketing expertise

Weaknesses:
• Dependence on carbonated soft drinks, which are facing declining demand in some
markets

• Limited presence in certain geographic regions compared to competitors

• Relatively high sugar content in many of its products, which may be a turn-off for some
health-conscious consumers

• Limited success with some recent product launches

Opportunities:
• Growing demand for healthier and more natural beverages, which Coca-Cola is actively
pursuing through acquisitions and product development

• Expansion into new markets, such as emerging economies

• Increasing popularity of energy drinks and other functional beverages

• Growing demand for sustainable and eco-friendly packaging solutions

Threats:
• Intense competition from both traditional rivals and emerging players

• Increasing regulations on sugary and carbonated beverages

• Fluctuations in currency exchange rates and other economic factors

• Shifts in consumer preferences towards healthier and more environmentally-friendly

products.

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TOWS Analysis for Coca-Cola:

Strengths-Opportunities (SO) Strategies:
i. Leverage strong brand recognition and marketing expertise to expand into new,
emerging markets, where demand for healthier and more natural beverages is
increasing.
ii. Diversify the product portfolio further by developing and promoting energy drinks and
other functional beverages that cater to consumers' health and wellness concerns.
iii. Utilize its global distribution network and supply chain to introduce sustainable and eco-
friendly packaging solutions to meet the growing demand.

Strengths-Threats (ST) Strategies:

i. Use the global distribution network and marketing expertise to fight back against intense
competition from both traditional rivals and emerging players.
ii. Expand the product portfolio to reduce dependence on carbonated soft drinks, which
are facing declining demand in some markets.

Weaknesses-Opportunities (WO) Strategies:

i. Focus on expanding into new markets, where Coca-Cola has a limited presence
compared to its competitors.
ii. Develop and promote healthier and more natural beverages to counter the relatively
high sugar content in many of its products and cater to health-conscious consumers.
iii. Learn from the limited success with some recent product launches and acquire or
partner with companies that have the necessary technical expertise to overcome such
weaknesses.

Weaknesses-Threats (WT) Strategies:

i. Cut back the operations and reduce the dependence on carbonated soft drinks to
minimize the impact of increasing regulations on sugary and carbonated beverages.
ii. Partner with or acquire companies that have the technical expertise to overcome the
weaknesses, reduce costs, and fight against the intense competition.

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Case: TOWS for Pakistan

Pakistan is a country located in South Asia, bordered by India to the east, Afghanistan and Iran to
the west, China to the northeast, and the Arabian Sea to the south. It has a diverse landscape
that includes mountains, plateaus, plains, and deserts.

With a population of over 220 million people, Pakistan is the fifth most populous country in the
world. The majority of the population is Muslim, and the official languages are Urdu and English,
though there are many other regional languages spoken as well.

Pakistan has a mixed economy, with agriculture and

services sectors being the largest contributors to its
GDP. The country is rich in natural resources,
including coal, gas, and minerals such as copper and
gold. The country has a significant textile industry,
which is one of its main sources of exports.

Pakistan has a complex political and social

landscape, with a history of military coups and
political instability. The country has also been
impacted by terrorism and sectarian violence,
particularly in the northwestern region. However, in recent years, the government has taken
steps to improve security and promote economic development through initiatives such as the
China-Pakistan Economic Corridor (CPEC), a massive infrastructure project linking China's
western regions to Pakistan's deep-water ports on the Arabian Sea. Despite its challenges,
Pakistan remains a resilient and dynamic country with a rich culture and history.

Strengths:
• Geopolitically important location as a gateway to Central Asia and the Middle East

• Large, young and growing population with a potential market for businesses

• Abundant natural resources, including minerals and fertile land for agriculture

• Strategic nuclear power

Weaknesses:
• Political instability and security concerns, including terrorism and insurgency

• High levels of corruption and a weak rule of law

• Limited industrial diversification and over-reliance on agriculture

• Poor infrastructure and inadequate power supply

Opportunities:
• Large and growing domestic market with a rising middle class

• Investment in infrastructure development, such as the China-Pakistan Economic Corridor

(CPEC)

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• Increasing globalization and potential for exports, especially in textiles and IT services

• Potential for growth in renewable energy sector

Threats:
• Tensions with neighboring India and Afghanistan, which could escalate into military
conflict

• Dependence on foreign aid and loans, which can be impacted by political and economic
conditions in donor countries

• Water scarcity and environmental degradation, especially in rural areas

• Vulnerability to natural disasters such as earthquakes and floods

TOWS analysis for Pakistan

Pakistan could consider strategies such as:

Strengths-Opportunities (SO) Strategy:

Pakistan can leverage its strategic location and young population to attract foreign
investment and expand its industrial and service sectors. The country can also promote
its abundant natural resources to enhance exports, especially in the renewable energy
sector.

Strengths-Threats (ST) Strategy:

Pakistan can focus on enhancing its security measures and governance to address the
concerns of foreign investors and multinational companies. It can also diversify its
economy by promoting small and medium-sized businesses and reducing its dependence
on agriculture.

Weaknesses-Opportunities (WO) Strategy:

Pakistan can address its political instability and corruption issues to improve the
business environment and attract foreign investment. It can also focus on developing its
infrastructure, especially through the CPEC initiative, to enhance its competitiveness in
the global market.

Weaknesses-Threats (WT) Strategy:

Pakistan can address its security and environmental challenges by investing in
sustainable and eco-friendly technologies. It can also diversify its agricultural sector and
promote the growth of non-traditional crops to reduce its dependence on water-
intensive crops.

These are just a few possible strategies that Pakistan can pursue based on the TOWS analysis.
The actual strategy adopted would depend on a range of factors, including the country's political
and economic situation, its strengths and weaknesses, and the opportunities and threats in the
global market.

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