Tows (2)

1. TOWS & Blue Ocean TOWS & Blue Ocean
Strategy AnalysisStrategy Analysis
- By Prof. Purvish Shah
BE (Mech), PGDBM (Gold Medalist)

2. -SWOT ( Strength, Weakness,
Opportunity, Threats)
-TOWS ( Threats, Opportunity, Weakness,
Strength)
Both are same in meaning but, in TOWS
all the functions are inter related with future
strategies and planning.

3. External External
OpportunitiesOpportunities
External ThreatsExternal Threats
Internal StrengthInternal StrengthSO “Maxi-Maxi SO “Maxi-Maxi
Strategy” Strategy Strategy” Strategy
that use strength that use strength
to maximize to maximize
OpportunitiesOpportunities
ST “ Maxi-Mini ST “ Maxi-Mini
Strategy” Strategy Strategy” Strategy
that use strengths that use strengths
to minimize to minimize
threats.threats.
Internal Internal
WeaknessWeakness
WO “ Mini – Maxi” WO “ Mini – Maxi”
Strategy that Strategy that
minimize minimize
weakness by weakness by
taking advantages taking advantages
of opportunitiesof opportunities
WT “ Mini-Mini” WT “ Mini-Mini”
Strategy that Strategy that
minimize minimize
weaknesses and weaknesses and
avoid threats.avoid threats.

4. Application of TOWS Matrix to Volks Wagon:
-This is a Germany based company in to
manufacturing of automobile.
-In 1980s company wanted to enter in to US
market
-Case discusses TOWS analysis done for them.

5. IT-Strong R & D and
Engineering
-Strong Sales and Service
Network
- Efficient Prod /
Automation
Capabilities
IWIW- Heavy Reliance on
One Product
- Rising Costs in Germany
- No Experience With U.S.
Labor
Unions if Building Plant in
the U.S.
EO -EO - Growing Affluent
Market Demands
More Luxurious Cars with
Many
Options
- Attractive Offers to Build
an
Assembly Plant in U.S.
- Chrysler and American
Motors Need
Small Engines
SOSO - - Develop and Produce
Multiproduct
Line with Many Options, in
Different
Price Classes ( like desser,
Audi Line)
- Build Assembly Plant
Using R & D,
Engineering.
- Build Engines for
Chrysler and AMC
WOWO - - Develop Compatible
Models for Different Price
Levels (Ranging from
Rabbit to Audi )
- To Cope with Rising
Costs in Germany, Build
Plant in U.S., Hiring
U.S. Managers with
Experience in
Dealing with U.S. Labor
Unions
ETET - - Exchange Rate:
Devaluation of Dollar in
Relation to
Deutshe Mark (DM)
- Competition from
Japanese and
U.S. Automakers
- Fuel Shortage and Price
STST - - Reduce Effect of
Exchange Rate by
Building a Plant in the U.S.
- Meet Competition with
Advanced
Design Technology
- Improve Fuel
Consumption Through
R & D
WT - Overcome
Weaknesses by Making
Them Strengths (Move
Toward OS
Strategy)
- Reduce Threat of
Competition by
Developing Flexible
Product Line

6. Blue Ocean Strategy:
Strategy where a business unit decides
to create new market space rather than
competing in existing market is known as
Blue Ocean Strategy.

7. Difference Between Blue Ocean and Difference Between Blue Ocean and
Red Ocean Strategy:Red Ocean Strategy:
-Try to create new market / Try to compete in Try to create new market / Try to compete in
existing market.existing market.
- Market or Industry not exist today / Market or Industry not exist today /
Grab the market share from your competitorGrab the market share from your competitor
-Demand is created / demand is foughtDemand is created / demand is fought
-More concentration on Innovation / Focus on More concentration on Innovation / Focus on
advertising, marketing, product promotionsadvertising, marketing, product promotions

8. SEQUENCE OF BLUE OCEAN STRATEGY:
- Buyer Utility ( Is there any exceptional buyer
Utility in your business idea?
- Price ( Is your price easily accessible
-Cost (Can you attain your cost target to
profit your strategy)
- Is it possible for you to put your plan in reality?

9. TATA NANO:
-Reverse pricing was done Price was set first
looking at what people could pay.
-Lower engine capacity for small city roads of
India.
- Supply chain being partner in development of
product itself.
- Save on costs like advertisement and special
distribution network.
- Entire Car to be built in Kit form and just do the
assembly.

10. SOME MORE EXAMPLES:
-PARAS PHARMA ( Move, Livon, Lipguard, Itch
guard, Dermi cool, etc. )
-Cavinkare – Launch of shampoo sachets for
“chick” brand.
-Nirma – Bottom of pyramid market ignored by
both HLL and P & G.