Swot and Tows

• Strengths
• Positive internal factors a company

can draw on to accomplish its
mission, goals, and objectives.
• Weaknesses
• Negative internal factors that inhibit a
company’s ability to accomplish its
mission, goals, and objectives.
Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved. 3-1
What to look for in Identifying Company’s
Strengths
• Core competencies in ______.
• A strong financial condition; ample financial resources

to grow the business.
• Strong brand name image/company reputation.
• Economy of scale and/or learning and experience

curve advantages over rivals.
What to look for in Identifying Company’s Strengths
• Proprietary technology/superior technological skills/important patents.
• Cost advantages over rivals.
• Product innovation capabilities.
• Proven capabilities in improving production processes.
• Good supply chain management capabilities.
• Good customer service capabilities.

Strengths
• Better product quality relative to rivals.
• Wide geographic coverage and distribution

capability.
• Alliances/joint ventures with other firms that provide

access to valuable Technology, competencies, and/or
attractive geographic markets.
What to look for in Identifying Company’s Weaknesses
• No clear strategic direction.
• No well-developed or proven core competencies.
• A weak balance sheet; burdened with too much debt.
• Higher overall unit costs relative to key competitors.
• A product/service with features and attributes that are

inferior to those of rivals.
Weakness
• Behind on product quality, R&D, and/or
technological know-how.
• Lack of management depth.
• Short on financial resources to grow the business

and pursue promising initiatives.
• Opportunities
• Positive external factors the company can
exploit to accomplish its mission, goals, and
objectives.
• Threats
• Negative external factors that inhibit the firm's
ability to accomplish its mission, goals, and
objectives.
Opportunities
• Utilizing existing company skills or technological
know-how to enter new product lines or new
businesses.
• Falling trade barriers in attractive foreign markets.
• Acquiring rival firms or companies with attractive

technological expertise or capabilities.
Opportunities
• Serving additional customer groups or market
segments.
• Expanding into new geographic markets.
• Expanding the company’s product line

to meet a broader range of customer
needs.
What to look for in Identifying Company’s Threats
• Increasing intensity of competition among industry
• Slowdowns in market growth.
• Likely entry of potent new competitors.
• Growing bargaining power of customers or suppliers.
• A shift in buyer needs and tastes away from the industry’s

product.
Step 3: Scan for Opportunities
and Threats
What to look for in Identifying Company’s Threats
• Adverse demographic changes that threaten to curtail

demand for the industry’s product.
• Vulnerability to unfavorable industry driving forces.
• Restrictive trade policies on the part of foreign

governments.
• Costly new regulatory requirements.

TOWS Matrix
TOWS Matrix
SO Strategies
• Strategies that enable competitive
advantage, external opportunities
match well with internal strengths,
allows for competitive advantage to
be built and maintained.
TOWS Matrix
ST Strategies
• Mitigation Strategies, firm possesses
internal strengths that facilitates
neutralization of external threats,
may lead to temporary advantage if
competitors are impacted by
environmental threats.
TOWS Matrix
WO Strategies
• Acquisition/Development Strategies,
situation where strategies are
formulated to acquire or develop new
resources/capabilities to take
advantage of external opportunities.
TOWS Matrix
WT Strategies
• Consolidation/Exit Strategies, if firms
can’t find ways to convert
weaknesses to strengths via
acquisition/development, exit from
market is recommended.
Applying SWOT Analysis
1. Review Case Material

2. Identify the Primary Problems/Issues
3. Analyze Internal/External Environments
4. Develop Strategic Alternatives
5. Make Strategy Formulation &
Implementation Recommendations

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• Strengths

• Positive internal factors a company

• A strong financial condition; ample financial resources

• Strong brand name image/company reputation.

• Economy of scale and/or learning and experience

• Cost advantages over rivals.

• Product innovation capabilities.

• Proven capabilities in improving production processes.

• Good supply chain management capabilities.

• Good customer service capabilities.

• Wide geographic coverage and distribution

• Alliances/joint ventures with other firms that provide

• No well-developed or proven core competencies.

• A weak balance sheet; burdened with too much debt.

• Higher overall unit costs relative to key competitors.

• A product/service with features and attributes that are

• Lack of management depth.

• Short on financial resources to grow the business

• Falling trade barriers in attractive foreign markets.

• Acquiring rival firms or companies with attractive

• Expanding into new geographic markets.

• Expanding the company’s product line

• Slowdowns in market growth.

• Likely entry of potent new competitors.

• Growing bargaining power of customers or suppliers.

• A shift in buyer needs and tastes away from the industry’s

• Adverse demographic changes that threaten to curtail

• Vulnerability to unfavorable industry driving forces.

• Restrictive trade policies on the part of foreign

• Costly new regulatory requirements.

1. Review Case Material

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