The TOWS matrix in strategy work. Usage, experience and usefulness

The purpose of this perspective is to reflect upon the usage, experience and usefulness of using the TOWS (Threats, Opportunities, Weaknesses, Strengths) matrix based on my personal impressions and experience made as a strategy consultant working on a strategic project for Nike's footwear segment in the USA. A TOWS matrix was created for the presentation (see Appendix A).

The key findings are that the TOWS matrix facilitates the development of strategic options which consider both external and internal factors. Moreover, the TOWS matrix forces a view on threats and weaknesses to make practitioners aware of aspects that need to be improved, overcome or changed (Weihrich, 1982). However, it has also been found that the TOWS matrix can frame and limit the thinking (Clegg, Carter & Kornberger, 2010).

The key lessons for practitioners are that strategy should never be fixed but provide a flexible orientation. Practitioners should make the TOWS matrix more dynamic by observing changes over time and by combining the TOWS matrix with a scenario analysis to flexibly adapt to changes in the external environment. Furthermore, practitioners could weigh the single strengths, weaknesses, opportunities and threats to make better strategic decisions.

Strategy is the "long-term direction of an organisation" (Johnson et al., 2017). It is an effective "approach towards anticipating, responding to and even altering the future environment" (Weihrich, 1982). Strategy-as-practice focuses on the work ofstrategy practitioners (Jarzabkowski & Spee, 2009) and how they use certain social aspects, material aspects as well as embodied aspects. Reckwitz (2002) stated that "carrying out a strategic practice very often means using particular things in a certain way". Strategy tools are these things that are used at specific stages in strategy work to illustrate the current situation, guide practitioners and finally to make strategic decisions (Jarzabkowski and Kaplan, 2014; Johnson et al., 2017). For example, they facilitate the strategic planning, the formulation of strategies and the analysis of strategies in terms of theirfeasibility, acceptability and suitability (Chereau & Meschi, 2017). Strategy tools are social aspects (Vaara & Whittington, 2012) which encompass concepts, ideas, techniques and approaches that structure or influence the work of strategy practitioners (Knott, 2006). They stem from explicit knowledge and focus on the micro-level of strategy work (Proctor, 2000). When taking a strategy-as-practice perspective, practitioners, for example consultants, use strategy tools as they undertake strategy work (PWC, n.d.). Tools are used to visualise and simplify complex relationships and contexts (Brown, Court & McGuire, 2014). Consequently, tools support and structure strategists' thinking and facilitate the engagement in strategy conversation (Johnson, Whittington, Scholes, Angwin & Regnér, 2017). Moreover, they help practitioners to sense opportunities, which match the business environment (BCG, n.d.). However, a one- type-fits-all approach can be inappropriate when decisions regarding the formation and implementation ofstrategies are solely based on it (Gunn & Williams, 2007). Moreover, practitioners need to be aware of unintended consequences, because the person using the tool shapes its results, through expertise, specific terminology and biased judgement (Jarsabkowski & Spee, 2009).

This reflective essay focuses on the TOWS matrix, a strategy tool. Usually, practitioners develop the TOWS matrix after conducting the external analysis, internal analysis and the SWOT (Strengths, Weaknesses, Opportunities, Threats) matrix (Kulshrestha & Puri, 2017). The TOWS matrix enables practitioners to conduct a situational analysis by linking external opportunities and threats to internal strengths and weaknesses (Weihrich, 1982). Consequently, the TOWS matrix can facilitate the generation, comparison and selection of suitable strategic options (Kulshrestha & Puri, 2017).

The purpose of this essay is to critically examine and reflect upon the usage, experience and practical usefulness ofthe TOWS matrix. This reflection is based on my personal experience and impressions gained during my participation in the development and delivery of a strategy presentation for Nike's footwear segment in the USA.

First, I describe my personal experience of using strategy tools as a strategy consultant, focusing on the TOWS matrix. Second, I critically reflect upon this experience during the course of developing and presenting the strategic review. Third, based on what was found before, I draw implications for strategy practice. These steps are part of the 'Experiential Learning Model' illustrated in Figure 1 and would then conclude in the testing ofthe implications in a new situation (Kolb, 1984).

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Figure 1: Experiential Learning Model (Kolb, 1984)

Experience and surprises of using the TOWS matrix

During the development of strategic options for Nike's footwear segment in the USA, my team focused on the long-term orientation and suitability, feasibility and acceptability of each option. Therefore, we had to consider external as well as internal perspectives. We combined the results ofthe external analysis and internal analysis to create the TOWS matrix. This helped us to generate, compare and finally select the best strategic option to pursue. Figure 2 illustrates a template ofthe TOWS matrix (Johnson et al., 2017).

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Figure 2: Template of a TOWS matrix (Johnson et al., 2017)

The use of the TOWS matrix in this scenario stimulated a more productive and less abstract discussion. Kulshrestha and Puri (2017) support this, finding that by first focusing on the external analysis and then relating this to the internal analysis, strategy work becomes more efficient. When reflecting upon my team's strategy work, I found that the TOWS matrix was especially useful for the formulation side of strategy. Moreover, it forced a view on weaknesses and threats and consequently highlighted aspects which could be improved, overcome or changed (Johnson et al., 2017).

My team's experience of using the TOWS matrix was significantly positive, because the TOWS matrix enabled and supported us in developing effective strategic options. We found that we spent too much time working on other strategy tools, especially Porter's Five, although Bruiji (2018) argues that Porter's Five Forces are still highly relevant in today's innovative and changing business environment. However, we found that scanning the external environment is not enough when developing a competitive position in the long­term. This is surprising in retrospect, because in the first instance, we underestimated the benefits the TOWS matrix offers, especially in contrast to the positioning view Michael Porter's five forces take (Porter, 1979). An external perspective is crucial in terms of understanding sources ofsustained competitive advantage in the field of strategic management (Barney, 1991; Porter & Millar, 1985). However, I learned that the TOWS matrix is more able to provide a long-term orientation for practitioners, because it additionally considers internal factors (Altmony, Masa'deh & Gharaibeh, 2017). Floyed and Wooldrige (2018) found that this is crucial when developing strategies for Nike, because of the collaboration between Nike's business units and their strategic integration.

Frequently, strategy practitioners conduct the SWOT analysis and fail to develop strategic options (Hiriyappa, 2018). The TOWS matrix recognises this limitation and focuses more on the strategic planning process (Weihrich, 1982; Figure 3).

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Figure 3: Strategic planning process (Weihrich, 1982)

It systematically identifies relationships between internal and external factors and bases strategies on them (Weihrich, 1982). Nonetheless, I found that the generation of strategic options for Nike required various skills, knowledge and experience. Mintzberg (1973) found the same, stating that regarding the strategic decision-making, entrepreneurial skills are required to inspire change and innovation by implementing new ideas. However, at the same time, one has to be a resource-allocator, who oversees and allocates various internal resources efficiently (Mintzberg, 1973).

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