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TOWS Analysis

Small Business Marketing

TOWS Analysis

Written by Clayton Reeves for Gaebler Ventures

TOWS is the way in which a company can employ their internal and external analysis and match these up to one another. Without a specific implementation program, the analysis from SWOT analysis is generally regarded as pointless. TOWS can help create a plan of action.

Everyone has at least heard of SWOT (Strength, Weakness, Opportunity, and Threat) analysis.

This is a great tool to get an idea of where the company is relative to their competitors. TOWS analysis takes this a step further and transforms the information from SWOT analysis into an implementation plan. This can be an improvement on SWOT, since SWOT doesn't actually state how to improve the company's positioning. TOWS attempts to create a plan of action using the tools that SWOT analysis provides.

Maxi-Maxi

This part of the model entails using strengths to maximize opportunities. The maxi-maxi form focuses on the firm's core competencies and uses those to create sustainable competitive advantage in the market place. Theoretically, this is what every company should be attempting to do. Usually, firms do not use their weaknesses to take advantage of opportunities; companies will put their best foot forward.

Maxi-Mini

Using strengths to minimize threats is the second part of the model. An example of this could be using an anti-cyclical brand or division to combat a slowdown in the economy as a whole. The internal strength of that brand may be the position and growth in their industry, and the external threat would be the possibility an economic slowdown. This could be alleviated by focusing on sales in that division.

Mini-Maxi

Minimizing weaknesses by taking advantage of opportunities is another successful strategy to take. If a firm is weak in sales growth, then taking advantage of a growth opportunity internationally could be an application of mini-maxi. The idea of this strategy is to turn your weaknesses into strengths in a similar fashion to the SWOT conversion strategy previously discussed.

Mini-Mini

The final part of this model is very difficult to do in practice. Minimizing weaknesses while avoiding threats can be accomplished if a firm successfully employs the previous three strategies. However, standing on its own, this strategy is asking for a little too much.

The TOWS strategic model can be used for a firm that needs more direction than a simple SWOT analysis. Although the model is not universally used or accepted, the evolution from SWOT is necessary. Using this model as a small business can help your firm move in the right direction. The absence of firm-wide strategic management can sometimes derail an organization. Using these strategies as an initiative in a small business will show potential investors that the firm is headed in the right direction.

When he's not playing racquetball or studying for a class, Clayton Reeves enjoys writing articles about entrepreneurship. He is currently an MBA student at the University of Missouri with a concentration in Economics and Finance.