Which strategies are defensive tactics directed at reducing internal weakness and avoiding external threats?

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix is an important matching tool that helps managers develop four types of strategies: SO (strengths-opportunities)

Strategies, WO (weaknesses-opportunities) Strategies, ST (strengths-threats) Strategies, and WT (weaknesses-threats) Strategies.3 Matching key external and internal factors is the most difficult part of developing a SWOT Matrix and requires good judgment—and there is no one best set of matches. Note in Table 6-1 that the first, second, third, and fourth strategies are SO, WO, ST, and WT strategies, respectively.

SO Strategies use a firm’s internal strengths to take advantage of external opportunities. All managers would like their organizations to be in a position in which internal strengths can be used to take advantage of external trends and events. Organizations generally will pursue WO, ST, or WT strategies to get into a situation in which they can apply

SO Strategies. When a firm has major weaknesses, it will strive to overcome them and make them strengths. When an organization faces major threats, it will seek to avoid them to concentrate on opportunities.

WO Strategies aim at improving internal weaknesses by taking advantage of external opportunities. Sometimes key external opportunities exist, but a firm has internal weaknesses that prevent it from exploiting those opportunities. For example, there may be a high demand for electronic devices to control the amount and timing of fuel injection in automobile engines (opportunity), but a certain auto parts manufacturer may lack the technology required for producing these devices (weakness). One possible WO Strategy would be to acquire this technology by forming a joint venture with a firm having competency in this area. An alternative WO Strategy would be to hire and train people with the required technical capabilities.

ST Strategies use a firm’s strengths to avoid or reduce the impact of external threats. This does not mean that a strong organization should always meet threats in the external environment head-on. An example of ST Strategy occurred when Texas Instruments used an excellent legal department (a strength) to collect nearly $700 million in damages and royalties from nine Japanese and Korean firms that infringed on patents for semiconductor memory chips (threat).

Rival firms that copy ideas, innovations, and patented products are a major threat in many industries. This is still a major problem for U.S. firms selling products in China.

WT Strategies are defensive tactics directed at reducing internal weakness and avoiding external threats. An organization faced with numerous external threats and internal weaknesses may indeed be in a precarious position. In fact, such a firm may have to fight for its survival, merge, retrench, declare bankruptcy, or choose liquidation.

Cons:

Although the SWOT matrix is widely used in strategic planning, the analysis does have some limitations.4 First, SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself. The matrix should be the starting point for a discussion on how proposed strategies could be implemented as well as cost-benefit considerations that ultimately could lead to competitive advantage. Second, SWOT is a static assessment (or snapshot) in time. A SWOT matrix can be like studying a single frame of a motion picture where you see the lead characters and the setting but have no clue as to the plot. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix. Third, SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

EXAMPLE:

What is a SWOT Analysis?

A SWOT analysis is a strategic planning tool that involves listing a company's strengths, weaknesses, opportunities and threats, or SWOT.

Strengths are things a business does well or advantages it has, such as dedicated workers, an innovative product design or a good retail location, while weakness are things a business does poorly or disadvantages it has.

Threats or external factors that might harm the business, such as competitors and unfavourable government regulations, while opportunities are external factors that the company might benefit the company, including untapped markets or favourable regulations.

After creating a list of strengths, weaknesses, opportunities and threats, managers think of ways the business can maximise strengths and use them to reduce weaknesses; take advantage of opportunities; and avoid or minimise threats

What is a TOWS Analysis?

A TOWS analysis involves the same basic process of listing strengths, weaknesses, opportunities and threats as a SWOT analysis, but with a TOWS analysis, threats and opportunities are examined first and weaknesses and strengths are examined last.

After creating a list of threats, opportunistic, weaknesses and strengths, managers examine ways the company can take advantage of opportunities and minimise threats by exploiting strengths and overcoming weaknesses.

SWOT vs. TOWS

SWOT and TOWS analysis involve the same basic steps and likely produce similar results.

The order in which managers think about strengths, weaknesses, threats and opportunities may, however, have an impact on the direction of the analysis.

Michael Watkins of the "Harvard Business Review" says that focusing on threats and opportunities first helps lead to productive discussions about what is going on in the external environment rather than getting bogged down in abstract discussions about what a company is good at or bad at.

WHAT TYPE OF STRATEGIES ARE THE PART OF TOWS MATRIX?

The SWOT Matrix is an important matching tool that helps managers develops four types of strategies:

1. SO strategies—use a firm’s internal strengths to take advantage of external opportunities.
2. WO strategies—are aimed at improving internal weaknesses by taking advantage of external opportunities.
3. ST strategies—use a firm’s strengths to avoid or reduce the impact of external threats.
4. WT strategies—are defensive tactics directed at reducing internal weaknesses and avoiding external threats.

Thanks to by Gregory Hamel , http://smallbusiness.chron.com/difference-between-swot-tows-analysis-23169.html

Re-write by

Yasser Zannoun

Which strategies are defensive tactics directed at reducing internal weaknesses and avoiding external threats?

Which defensive techniques are aimed at decreasing internal weaknesses and avoiding external threats?

Which strategies aim at improving internal weaknesses by taking advantage of external opportunities?

Which strategies use a firm's strengths to avoid or reduce the impact of external threats?