Fundamentals of management - SWOT & TOWS Analysis
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The document explains SWOT and TOWS analyses as strategic tools for organizations to achieve their goals, focusing on internal strengths and weaknesses and external opportunities and threats. Introduced by Albert S. Humphrey in the 1960s, SWOT analysis helps evaluate a company's position relative to competitors, while TOWS emphasizes external factors to identify strategic options. Both methods, despite their simplicity and limitations, can be enhanced with software to create structured analysis and prioritize actions effectively.
Fundamentals of management - SWOT & TOWS Analysis
- 1. SWOT and TOWS Analysis Intended Audience: EPGDM 2014-2015 Term: I Subject: Fundamentals of Management Presented by: Neha Ghorad
- 2. Introduction • Definition : SWOT and TOWS are strategy tools used in order to achieve the targeted goals of the organisation. • Used by profit making as well as Non profit making organizations. • Can be implemented at both the organizational levels (companies, departments and divisions) as well as individual development. • These tools are formed by the pneumonic basically representing : • S -> Strength • W -> Weakness • O -> Opportunity • T -> Threat
- 4. Strategy/ Business Strategy A business plan intended to achieve long term aim of the organization. SWOT Analysis Originated by Albert S Humphrey in the 1960s, its a decision making tool that analyses your current position in marketplace in comparison with your competitors and helps to achieve the business strategy. It should cover the areas like marketing, financial, manufacturing and organizational. Introduction
- 7. SWOT Analysis • External • Negative • External • Positive • Internal • Negative • Internal • Positive STRENGTH WEAKNESS THREATOPPORTUNITY SWOT
- 8. Advantages • Simple and only costs time to do • Helps to generate new ideas using a particular strength to use against a threat in the market. • When a potential threat is known, company can have responses and plans ready to counter them.
- 9. Disadvantages • It’s a simple list and presented very critically • If company compiles the lists it may not be focussed sufficiently on how to achieve its objective. • List approach may not define the priorities well.
- 10. Best SWOT Analysis • SWOT softwares are nowadays available to help formalise the process and give analysis structure. • Best SWOT will be more than a simple list. • It will consider the degree of strength and weakness versus its competitors to determine how good that strength really is. • A best SWOT should also look at the size of the opportunity or threat and inter relate with its strengths and weaknesses.
- 11. TOWS Analysis • TOWS analysis is a variation of SWOT analysis • TOWS is a different arrangement of strengths, weaknesses, opportunities and threats. • TOWS emphasizes the external environment whilst SWOT emphasizes the internal environment. • The Analysis results in a SWOT or TOWS Matrix as: Strengths Weaknesses Opportunities Threats
- 12. TOWS Analysis • Identifying Strategic Options like to make most of strengths, Circumvent weaknesses, Capitalize on opportunities and Manage threats. • A next step of analysis, usually associated with the externally-focused TOWS Matrix, helps to think about the options that one could pursue.
- 13. External Opportunities (O) 1. 2. 3. 4. External Threats (T) 1. 2. 3. 4. Internal Strengths (S) 1. 2. 3. 4. SO "Maxi-Maxi" Strategy Strategies that use strengths to maximize opportunities. ST "Maxi-Mini" Strategy Strategies that use strengths to minimize threats. Internal Weaknesses (W) 1. 2. 3. 4. WO "Mini-Maxi" Strategy Strategies that minimize weaknesses by taking advantage of opportunities. WT "Mini-Mini" Strategy Strategies that minimize weaknesses and avoid threats. TOWS Strategic Alternatives Matrix