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Business operators need to understand the strengths, weaknesses, opportunities and threats of their business. Analysing these is often referred to as a SWOT analysis. The TOWS analysis is an extension of the SWOT analysis.

Situation Analysis

The following TOWS technique aids in developing an understanding of where your business is now.

TOWS Listing

• Threats and opportunities are external environment factors and you do not have control over theses. They are outside the business. Changing demographics and an aging population might be considered an opportunity for the health services sectors. New competitors or products may be considered as threats.
• Weaknesses and strengths are internal factors and you do not have control over these. They are inside the business. Poor location or not enough capital are examples of weaknesses. Good reputation would be considered a strength.
• The necessary information for this TOWS process would have been identified and collected during the environment analysis.
• How many items ought to be listed for each TOWS factor? That depends, there is no magic number. Each business will develop a different list and will contain a different number of items.

TOWS Analysis

After you have listed the threats, opportunities, weaknesses and strengths, the second step is to perform a TOWS analysis. It structures the information so that it is easier to analyse and consider future actions (strategies). It is now possible to consider strategies based on the factors listed in the table.