Assignment 09: Cost, Differentiation, Focus & Strategy

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Chapter24.pptx

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Strategic Analysis for Healthcare

Chapter 24

Health Administration Press

TOWS Matrix

The TOWS matrix is one of the most widely used strategy development tools. It adapts the SWOT matrix to develop specific strategic options for your organization.

Using TOWS, the SWOT components are matched in pairs, and strategies are developed to address them.

When matched, the SWOT factors yield four groups of strategic options.

To construct the TOWS matrix, boxes for the SWOT components are placed on the outside of a four-cell matrix, with strengths and weaknesses on the horizontal axis and opportunities and threats on the vertical axis.

Health Administration Press

TOWS Matrix

Health Administration Press

TOWS Matrix

The intersections of the SWOT components form the basis of the TOWS strategy pairs, which occupy the four matrix boxes.

The TOWS pairs are named according to the initials of the intersecting components—SO, WO, ST, and WT.

Health Administration Press

TOWS Matrix

Health Administration Press

TOWS Matrix: Strategic Approaches

SO strategies: Match internal strengths with external opportunities. These strategies leverage the strengths to exploit the opportunities.

WO strategies: Match internal weaknesses with external opportunities. These strategies compensate for internal weaknesses by exploiting external opportunities.

ST strategies: Match internal strengths with external threats. These strategies attempt to use strengths to avoid or reduce the impact of external threats.

WT strategies: Match internal weaknesses with external threats. These strategies are defensive in nature and attempt to reduce internal weaknesses and avoid external threats. Generally, these strategies do not create strengths but rather protect from loss.

Health Administration Press

TOWS Matrix

The ideas identified in your prior SWOT analysis are paired, and strategies to address them are brainstormed.

Each brainstormed strategy is followed with the number of the pair in parentheses so one can see where the brainstormed idea came from. For example, “(S4, O2)” indicates Strength 4 matched with Opportunity 2.

See page 157 in the book for an example of strategy creation.

Health Administration Press

TOWS Matrix

of Healthcare Executives. Not for sale.

Health Administration Press

TOWS Matrix

The strategist should attempt to develop five to ten feasible or potential strategies per block.

Not all strategies will be viable, but they should be reasonable.

You are not necessarily endorsing or keeping the strategies just because you list them here.

Specific strategy selection will come later.

The task here is to come up with as many reasonable alternatives as possible.

TOWS development is best done through team brainstorming in order to capitalize on each team member’s strengths and differing thought processes.

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Exercise

Break into groups and brainstorm strategies for the strategic pairs. Use page 159 in your book.

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Strengths Weaknesses Opportunities Threats Strengths Weaknesses Opportunities Threats

Strategies

WO Strategies ST Strategies WT Strategies Strengths Weaknesses Opportunities Threats