SWOT & TOWS AnalysisSWOT analysis SWOT analysis (alternately SLOT analysis) is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, andThreats involved in a project or in a business venture. The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. These come from within the company's unique value chain. SWOT analysis groups key pieces of information into two main categories:
SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade companies to compile lists rather than think about what is actually important in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats. It is therefore advisable to combine a SWOT analysis with portfolio analyses such as the GE/McKinsey matrix [2] or COPE analysis[3]. It is prudent not to eliminate too quickly any candidate SWOT entry. The importance of individual SWOTs will be revealed by the value of the strategies it generates. A SWOT item that produces valuable strategies is important. A SWOT item that generates no strategies is not important. In SWOT, strengths and weaknesses are internal factors.For example: A strength could be:
An opportunity could be:
SWOT OR TOWS Analysis (TOWS Matrix) SWOT is the acronym for strength, weakness, opportunities and strengths whereas TWOS is the acronym for threats,weakness,opportunities and strengths both refers to the same thing. SWOT or TWOS analysis use by the firm to develop strategies or we can say possible set of strategies. Strategist prefer SWOT or TWOS because it gives alternative set of strategies which help the firm to choose the strategies suit the firm in terms of available resources. SWOT analysis is not only the part of strategic management, it’s also the part of marketing, human resource and other business areas. In this tutorials we will discuss the way to developTOWS matrix and its attributes in detail and also give examples to show firm develop strategies using TOWS or SWOT matrix. What are the things need to be included in TOWS or SWOT matrix?TOWS or SWOT matrix as discussed above consist of strength, weakness opportunities and threats, using these variety of strategies are developed. The most common tabular form of the SWOT or TWOS is shown in the figure below. I would like to explain strengths,weakness opportunities and threats before going into details to make easier for the readers unfamiliar to this topic. Strengths Strengths are the strong areas or attribute of the company, which are used to overcome weakness and capitalize to take advantage of the external opportunities available in the industry. Weakness Weakness are painful for the company means these are the weak factors which needs to be improve in future otherwise if they exposed to the competitors they can take the advantage of it. Opportunities Opportunities are the chances exist in the externalenvironment, it depends firm whether the firm is willing to exploit the opportunities or may be they ignore the opportunities due to lack of resources. Threats Threats are always evil for the firm, minimum no of threats in the external environment open many doors for the firm. Maximum number of threats for the firm reduce their power in the industry. How to identify strengths,weakness,opportunities and threats for TWOS Matrix?Well, if you have same question them its a good one, finding strengths, weakness, opportunism and threats is deep thinking process. The best thing to do ask the decision maker,employee, strategic partners and customer as well about your good and bad points. The other way out to use some statistical and mathematical tool.In strategic management strengths and weakness are extracted from IFE matrix, opportunities and threats from EFE matrix. Example of Wal-Mart Strengths,Weakness,Opportunities and Threats Wal-Mart Strengths
The above TWOS matrix show the four type of strategies, SO strategies are developed using PSO strengths to exploit the external opportunities, WO strategies are developed to overcome weaknesses by utilizing the opportunities. ST strategies are developed by PSO to minimize or eliminate the threats using the internal strengths and last WT strategies are developed to avoid threat and minimize weaknesses. |
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