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APPLICATION OF THREATS, OPPORTUNITIES, WEAKNESSES AND STRENGTHS (TOWS) MATRIX STRATEGIC PLANNING MODEL IN MANUFACTURING FIRMS IN NIGERIA

Business Administration & Management Project Topics

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF THE STUDY

A major aim of enterprises is to build a market position strong enough and an organization capable enough in producing successful performance despite foreseeable events, potent competition, internal and external organizational problems (Nimmanphatcharin, 2003:13). Global competition requires that managers think of ways to change their organizations continuously to gain competitive advantage. The complexity of  today’s operative environment necessitate adoption of a best practice strategic planning model in meeting contemporary challenges faced by organizations in terms of domestic and  cross border product competitiveness (Faulkner and Bowman,2007:45).

Eze (2001:35) posits that both organizations and their managers are subject to changes which render once-effective approaches to competition ineffective.  Ezigbo (2007:79) states that managers introduce changes to solve organizational problems like low productivity, laissez-faire attitude, conflicts, and competitive pressures.

The turbulence encountered by manufacturing organizations in Europe, America and the Far East in the late 1980’s coupled with competition introduced by globalization and free market economy forced firms to review the quality of their strategic formulations by putting in place a strategic planning framework known as the TOWS matrix that identifies threats and opportunities in the external environment and objectively seek to match them with identified internal organizations weaknesses and strengths in a logical manner in order to remain competitive (Eaton,1999:83).

Itami (2007:29) posits that the proactiveness necessary to place Nigeria’s manufacturing firms in the league of best practice firms for strategic leadership in their spheres of economic endeavour is lacking admist stiff competition and a diversity of industry and environmental challenges.

Strategy involves the critical decisions a firm makes about how to match its resources and strengths with its environment to create an advantage over its competitors. The decisions to pursue a strategy type be it, Business level (competitive) strategy, Corporate or Functional level strategy are viewed as measures that can fastrack or impede the adoption, adaptability and sustainability  of strategic planning frameworks in organizations. The decisions are also rooted on certain organization culture which affects the resistance or acceptability of change. Furthermore, organisational ideology and strategic planning orientation be it Ansoff’s strategic planning model, Mintzberg’s design school model, Steiner’s company-wide planning, or Wheelen and Hunger’s strategic management model also determine the strategy a firm will pursue, as large scale  preponderance of conservatism and resistance to change exist in firms.

Strategic Planning, being a management function relies on the competence of management-level employees for effective implementation. Arising from this, it is viewed that management’s  human resource capacity in terms of core skills determines the extent to which it would pursue and   implement strategic models be it of synoptic, adaptive or synthesis (synoptic- adaptive) origin.

The integration of management’s strategic intent in strategy development to drive organisations visions and missions are also seen as key to the sustainable application of TOWS matrix strategic planning model in meeting desired performance. Hoffer and Schendel (1978:25) posit that an effective planning model must explicitly include the visions and missions of the firm, an establishment of firm’s objectives, and an assessment of the current strategy based on a comprehensive scanning of environmental analysis elements. Studies by Wihioka (2006:89), shows that firms in Nigeria apply Strategic Planning processes with low degree of formality and comprehensiveness, and doubts the reliability of formulated strategies to assure firms of desirable performance.

A variety of strategic planning frameworks based on synoptic, adaptive and synthesis (synoptic-adaptive) ideologies have been developed, showing the relationship of critical internal and external environment variables; including- The SWOT Analysis model, Critical Success Factors (CSF’s) models, and Strategic Factor Evaluation Matrix (SFEM)  models- Internal Factor Evaluation (IFE) matrix model, External Factor Evaluation (EFE) matrix model, Internal-External (IE) matrix model, Strategic Positioning and Action Evaluation (SPACE) matrix model, Quantitative Strategic Planning (QSPM) matrix model, Grand Strategy (GS) matrix model, and matrix models – Boston Consulting Group (BCG) matrix model, and General Electric Business Screen Matrix.

These models aside from showing the relationship of critical internal and external environment variables are fraught with certain inherent structural and operational limitations that inhibit their individual and collective capabilities to providing feasible alternative strategies for firm’s competitive advantage, as do the TOWS matrix model (Weihrich and Koontz 2005:15; Hirsch, 2006: 327; Davis, 2007: 32). The limitations include the following:

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