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SWOT and TOWS: from four boxes to four kinds of move

SWOT lists strengths, weaknesses, opportunities and threats. TOWS is the step that pairs them into moves. A worked example for each level of the ladder.

Where SWOT comes from: disputed. SWOT is often credited to Albert Humphrey of the Stanford Research Institute (SRI), or to Harvard Business School’s business-policy teachers of the 1960s. A 2023 archival study in Long Range Planning by Richard Puyt, Finn Birger Lie and Celeste Wilderom, “The origins of SWOT analysis”, traces it to the “SOFT” approach (satisfactory, opportunity, fault, threat) of Robert F. Stewart’s long-range planning group, published by SRI in 1965 and later relabelled SWOT. The study says the Harvard claim could not be corroborated. We follow the study, but the origin has long been argued over, so treat any single name with care.

Where TOWS comes from. Heinz Weihrich of the University of San Francisco set out the TOWS matrix in “The TOWS Matrix: A Tool for Situational Analysis”, Long Range Planning, volume 15, issue 2, 1982.

What they are

SWOT sorts what you know into four boxes:

  • Strengths and weaknesses are inside the business: things you control.
  • Opportunities and threats are outside it: the market, rivals, rules.

A SWOT on its own is a description. TOWS is the step that turns it into moves, by pairing an inside box with an outside box:

  • SO moves: use a strength to take an opportunity.
  • ST moves: use a strength to defend against a threat.
  • WO moves: fix a weakness so you can take an opportunity.
  • WT moves: reduce a weakness that a threat could exploit. These are often about survival.

When to use them

  • Once a year, and before a climb to a new sub-level.
  • When a big change arrives: a new rival, a brand policy, a rule change from your PESTLE scan.
  • With Porter’s Five Forces: the forces fill the opportunities and threats boxes.

Worked examples, one per level

Each example is made up to show the method.

Level 1: a distributor (1.3)

Hypothetical An FMCG distributor in a district town

Strengths

  • Delivery to 250 shops twice a week
  • Good collections record

Weaknesses

  • One brand is most of the sales
  • Stock records on paper

Opportunities

  • A second, non-competing brand wants a distributor
  • Shops are taking orders on apps

Threats

  • The brand selling direct to big stores
  • Quick-commerce apps in the town

TOWS moves. SO: take the second brand on the same delivery routes. ST: offer the small lots and short credit that shops rarely get from apps. WO: move stock and orders onto software before adding the brand. WT: reduce dependence on the one brand to under half of sales.

Level 2: an authorised dealer (2.2)

Hypothetical A tractor dealer

Strengths

  • A busy workshop
  • Long ties with farmers and lenders

Weaknesses

  • High stock on the floor before the season
  • One salesperson does most deals

Opportunities

  • Implements and spares sales
  • A nearby taluka without a dealer

Threats

  • A weak monsoon
  • The brand raising targets

TOWS moves. SO: sell implements and spares through the workshop. ST: lean on service income in a bad year. WO: train a second salesperson before opening a branch. WT: agree stock levels and finance limits with the brand before the season.

Level 3: a Tier 2 supplier (3.3)

Hypothetical A machined-parts maker supplying a Tier 1

Strengths

  • Low rejection rate
  • Approved by one Tier 1

Weaknesses

  • Most sales go to one customer
  • Old machines

Opportunities

  • Another Tier 1 is looking for a second source
  • Electric-vehicle parts

Threats

  • Yearly price-downs
  • Parts that electric vehicles don't need

TOWS moves. SO: use the quality record to win the second Tier 1. ST: show cost data to negotiate price-downs. WO: buy one new machine for electric-vehicle parts. WT: keep the biggest customer under half of sales. See One big customer.

Level 4: a product startup on licensed technology (4.2)

Hypothetical A water-filter start-up using a licensed lab technology

Strengths

  • A licence to a tested technology
  • A founder who knows rural buyers

Weaknesses

  • Little money for marketing
  • No in-house R&D yet

Opportunities

  • Government and NGO buyers
  • Dealers who already sell pumps

Threats

  • Cheaper filters from big brands
  • New certification rules

TOWS moves. SO: sell through pump dealers who already reach rural buyers. ST: compete on running cost, not price. WO: partner with the licensing lab on the next version. WT: get the product certified early. See technology transfer.

Common mistakes

  • Stopping at the four boxes. Without TOWS, SWOT is a list. Every box should lead to at least one move.
  • Mixing inside and outside. “A new rival” is a threat, not a weakness; “slow deliveries” is a weakness, not a threat.
  • Vague entries. “Good service” is not a strength unless you can say what is better and for whom.
  • Too many entries. Keep three to five per box, and rank them.

Related: SOAR, a strengths-first alternative, and NOISE for weekly checks.

SWOT's origin is disputed (see above). TOWS is Heinz Weihrich's, from his 1982 Long Range Planning article. The explanation and the examples are ours.

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