Transform or die sounds pretty dramatic, but in today’s globally competitive and volatile environment no business can afford to sit back and do nothing.
However, many businesses are so busy working in their business they feel they have the time to work on their business. As a result, their business strategy is placed in a drawer to gather dust—box ticked, set and forget!
By building scanning of your internal and external business environment into the way you operate, you can have your organisation’s strengths and weaknesses top of mind while remaining on the lookout for opportunities and threats emerging on the horizon.
With the planning cycle underway for the financial year ahead, this article is a timely reminder about how using strategic planning tools, such as a SWOT and TOWS analysis, helps you to:
get a better understanding of the choices that you face
generate strategic options to better position your business.
What is a SWOT?
SWOT is an acronym for:
S = Strengths—internal strengths of your business you can make the most of
W = Weaknesses—the internal weaknesses of your business that you will need to circumvent
O = Opportunities—external opportunities that you could capitalise on
T = Threats—external threats to your organisation that you will need to manage.
Why do a SWOT analysis?
Taking time to recognise the ‘strengths’, ‘weaknesses’, ‘opportunities’ and ‘threats’ your business faces is a great way to begin the discussion about how to market by forcing your team to consider all aspects of your organisation and its competitive position in the marketplace.
When do you do a SWOT analysis?
A SWOT analysis is conducted after you’ve undertaken your market research (qualitative and quantitative) and internal and external business analysis using tools/frameworks such as the PESTLE, Porters Five Forces and a competitor analysis.
Your findings from this analysis inform your SWOT analysis. A TOWS analysis is undertaken later in the process when you’re ready to decide on the way forward.
The SWOT analysis template
What is a TOWS?
A TOWS is a tool to generate, compare and select strategy options—different from a SWOT analysis, which is a tool to audit and analyse.
TOWS analysis tool
For most businesses, there is a trade-off between internal and external factors. Strengths and weaknesses are internal factors, whereas opportunities and threats are external factors, and where our four potential strategies derive their importance.
The four TOWS strategies are Strength/Opportunity (SO), Weakness/Opportunity (WO), Strength/Threat (ST) and Weakness/Threat (WT). For example, by identifying a strength and leveraging an opportunity you can generate options to take advantage of an opportunity.
Like many tools, models, concepts and frameworks, a TOWS analysis is subjective, and only as robust as the data that you include within the model.
The goal here is to be ahead of the game. By being vigilant and agile you’ll be setting your business on a trajectory for sustainable success.