TWOS And SWOT Matrix Analysis In The Restaurant Industry

SWOT Analysis for a new Production of a business

Discuss about the TWOS and SWOT Matrix Analysis.

TWOS matrix analysis and SWOT matrix analysis both are playing the significant role in each and every industry. In this study, the significance of TWOS matrix and SWOT matrix will be evaluated by well-established research and arguments. First of all, the difference between TWOS matrix and SWOT matrix analysis is needs to understand. According to many types of research, TWOS is a kind of term which includes organizational threats and opportunities according to priority. On the other hand, the SWOT analysis includes both internal and external factors such as strengths, weakness, opportunities and threats. Moreover, how the TWOS matrix and SWOT matrix analysis helps to improve the performance of the organization will be explained in this assessment.

In the field of the Restaurant industry, there are various types of food product. Each and every restaurant tries to catch the market by making some attractive changes in their menu card. Here we are to find out how the SWOT analysis has been used to launch a new dish to the restaurant market. SWOT means Strength, Weakness, Opportunities, and Threats.

Strength

In order to identify the strength, the restaurant staffs need to know the best ability in them. They have to give tasty food as well as a sufficient quality of service to their customers. That is the main strength of restaurant which needs to be applied to them. They can also provide some décor which makes some fun with eating food for the customers. The pricing structure is a crucial part of the restaurant. It is the main strength as well as weaknesses for the restaurant. The owner of the restaurant must be aware of the food prices of other restaurants which placed in the similar area. They may use some promotional offers to their customers and exclusive discounts to their existing clients. That is the strength of the restaurant. Also, there have some environmental factors which develop restaurant strength. The central power part contains the entire Staffs ability, food quality and customer loyalty of the restaurant. So by maintaining those they can improve their strength.

Weakness

If one considers the strength, he/she must be aware to consider the weakness of the business. A restaurant, in this case, must be aware of the fact in which it has gained negative feedback. In the case of launching a new food item, weakness of the restaurant must be checked.

TOWS Analysis

Opportunities

It’s the fact where a market provides a friendly environment for the business. In this case, the manager of any particular restaurant must seek knowledge about the taste criteria of the customer. The criteria can be brought as the opportunity for the business. It will also help to launch a new food product in the market.

Threats

This particular issue of threat can appear if there are some competitors of the same category. Here in this case, if any other restaurant launches the same food product, then it can be a threat to any other restaurant. One must be aware of this fact before launching the new food product.

TOWS analysis is another tool for launching any new product in the market and getting positive feedback. This process is exactly the opposite of the SWOT analysis. The term TOWS defines threats, opportunities, weaknesses and strengths. In this process, the organization, here the restaurant must analyze the threats first and after that, they should analyze the opportunities, weaknesses and the strength of the organization respectively. This business analyzing tool is as much valuable as the SWOT analysis is and it has its importance. Each of the aspects of this process is useful for the chosen company to launch a new product in the market.

S/O Strategy

This strategy is mainly used to capitalize the internal strength on the external opportunities. Here in this case the capability of the cheff will decide how a restaurant will capture the market by new exciting dishes.

W/O Strategy

In this strategy internal weakness can be improved by external opportunities. A restaurant has a weakness in a particular field of cooking, where the demands of numbers of customer force him to do that weak part more and more that the weakness of that zone improved.

S/T Strategy

This is the most common way of doing business. A business can remove the threats by its internal quality only. A restaurant can attract the customer by its best dishes where other will fail to serve the best.

W/T Strategy

This is the most defensive position of TOWS. The threats are only avoided here to minimize the weakness. It means if a restaurant faces any thrats like equal level competitors, the situation would be avoided just to decrease the weakness.

There are various types of theory and models already established the significance of TOWS matrix in the restaurant industry. According to the Wheelen and Hunger, in order to illustrate the external opportunities and threats by the organization, TOWS matrix is playing a significant role. In addition, by facing external factors of TOWS matrix such as opportunities and threats, an organization can be matched with that particular organization’s internal factors of TOWS matrix such as strengths and weakness(Fine, 2009). Moreover, four sets of possible strategic alternatives can be formed through this analysis such as SO strategies which includes the advantages of opportunities by using strengths. WO strategies that form strategies to take advantages of opportunities through overcoming weakness, ST strategies that generate strategies to avoid threats by using strengths and WT strategies includes strategies to minimize weakness and avoid threats.

TOWS matrix analysis

Strengths

In terms of restaurant industry which includes specific internal and external factors of TOWS analysis. In addition, there are three different types of issues are identified in the strengths factor of the TOWS matrix analysis of restaurant industry such as strong financial position (1), cost efficiency(2), good marketing and management capabilities(3). In other sense, a start-up business always requires capital in order to expand the business. So, the first segment of the strengths segment is very important which strong financial position is. According to many types of research, a successful business needs resources which mainly provided by the owners of the organization(Sears, 2003). This part of the strengths includes a financial support to face any difficulties. On the other hand, cost efficiency is one of the vital segment of the strengths because through this a new restaurant can retain financial support. In other words, cost efficiency can be done through various types of techniques such as reduce the cost of products which are supplied by suppliers, reduce extra cost which no longer accessible. Apart from that, good marketing plan and proper management are two significant issue which leads an organization to success. For example, if the marketing plan of a new restaurant is accurate then the portability of that particular restaurant will be generated automatically. In addition, the management should pay attention to daily operational activities to regulate and control the organization properly. In addition, the promotional activities can increase the revenue of that particular restaurant(Walters & Halliday, 2005). 

Weakness

Talking about the weakness of the restaurant industry which includes several aspects such as poor customer service (1), high rates of food (2) and poor management system (3). First of all, customer is the most important segment of each and every industry, so customer satisfaction is playing a significant role in the restaurant industry. As well as a newly launch restaurant needs to provide good quality food and service to improve their profitability. On the other hand, the staff of restaurant needs to understand the customer’s intention because only staffs attend the customer directly. Apart from that, the rates of food are one of the major issues in the restaurant industry. There are various types of factors involved in the decisions of rates of items in the restaurants such as the price of fresh vegetables, the salary of staffs, maintenance of restaurants, etc. according to many studies; it is clearly notified that due to the economic value many organizations have to increase the price of their products. Finally, the management should pay attention to each and every fundamental activities of the restaurant in order to increase the performance(Alli, 2004).

Strengths

Threats

In terms of threats, the rival companies or restaurants are the most significant threats of a newly developed restaurant. According to the TOWS matrix analysis, the external threats includes some several segments such as exchange rate (1), competition with rival restaurants (2), quality of food and cost (3). In order to minimize the impact of external threats, the newly developed restaurant should implement an effective strategy which is influenced by ST and WT strategies. There are various ways available which lead an organization to the success by avoiding threats by using the strengths. For example, reduce the impact of exchange rate by creating a plant in that particular country where the restaurant is situated(Proctor, 2000). On the other hand, in order to meet the competition, the newly developed restaurant should implement low-cost strategy which can attract more customers. Apart from that, the quality of food can automatically spread the fame of that restaurant. Lastly, the quality of food can be improved by appointing skilled cooks and staffs who provide excellent service to the customers.

Opportunities

TOWS matrix analysis also includes external opportunities such as growing demands of tasty food with affordable price (1), national and international dish items with the attractive price (2) and drinks and beverages available under the same roof (3). First of all, the demand of tasty is always create a scope for a newly developed restaurant. In order to produce delicious food, the management of restaurant must recruit experienced chef who can make good quality food. On the other hand, most of the people are preferring international items to taste different. So there is a huge scope to increase the profit through providing special dishes. Aside from that, many people like drinks and beverages as the last item of the meal. So, the newly developed restaurant must include theses drinks and beverages and grab this effective opportunity(Zhu & Sun, 2011).

The SWOT matrix analysis is a to an extraordinary degree important gadget for analyzing and seeing an extensive variety of business and association's terms and circumstances. The SWOT matrix analysis is isolated into two critical parts, for example, internal components and external variables(Ingaldi, 2014). Also, the SWOT matrix analysis incorporates four huge components, for example, Strengths, Weaknesses, Opportunities, and Threats. Aside from that, the strengths and weakness are joined into internal segments, on the other hand, the external components spread opportunities and weakness. Then again, the SWOT matrix analysis gives the framework to review the technique, heading and position of the association or for an association, or whatever other thought.

The internal factors of the newly developed restaurant consolidate the benefits, broad and society qualities inside the business part. The internal variables can be controlled by the administration of the organization since they can improve employee performance. As follows, the brand putting is upgraded by those internal components. Similarly, the internal variables spread distinctive sorts of assets, for instance, building, cash related position, and another physical base.            

Strengths

The strengths consolidate positive outcomes and humble advantages of any organization. Thus, the quality joins physical assets, for instance, devoted clients, credit, equipment, capital, structures of procedure, information, licenses and existing channels of scattering and others noteworthy resources. In a SWOT analysis, qualities portray the significant capacities of an organization(Panagiotou, 2003). Furthermore, fundamental segments that may make a particular venture more slanted to succeed and zones. Besides that, the deciding objective to recognize the positive properties of the operational components of the organization, the strengths evaluate each variable, for representation, advancing, creation and assets. Then again, it might have purposes of enthusiasm over other near organizations. For example, if a developed gain organization courses of action to dispatch another thing, affirmation might be recorded as quality. Other than that, organizations that think about their qualities are better prepared to upgrade and Enterprise them further reinforcing their great fortune.

Weakness

Weakness is a kind of term which express the corrupted estimation of the things or any trouble differentiated and adversary organizations in the business area. In other sense, the organization routinely incorporates a few barriers which choose their weakness. There are distinctive sorts of weakness arranged in the organization(SWOT analysis, 2008). Weakness can be characterized as hindrances which make trouble to get new opportunities. For example, a complete customer database is a vital weakness which diminishes the wage of an organization. In other sense, it can make a particular venture more loath to succeed and goes where an organization is particularly inadequate. On the other hand, the potential rival organization's things are a capable weakness that makes an impact on organizational execution. Furthermore, weakness is recognized, business figures out how to diminish the impact or change them into qualities(Applegate, 2000).

External factors

The external factors are accepting a key part in every organization in light of the way that the administration can't control those external variables. In addition, the huge external variables are opportunities and weakness which incorporates assistants, suppliers, and contenders. Moreover, particular sorts of frameworks of the organization conduct feasible ways to deal with utilizing those external components.   

Opportunities

Opportunities are things that can extend advantages, effectiveness or preferred standpoint a business in some other path given various reasons the open entryway can happen before the organization(Tidd & Hull, 2003). Opportunities may have a spot structure of customer lifestyle changes, current monetary circumstance, and new systems for the creation and pushed advancement to increase profit. However, the need of clients can make an unfathomable open entryway for the organization which can assemble the arrangements. In addition, watching and missing opportunities are basic parts of keeping up a productive business.

Threats

Threats are the last segment of a SWOT matrix analysis, and it is the hugest component among all components which can hurt business. In addition, the most key part of the SWOT matrix analysis since it consolidates most external risk which is going up against by the organization. As such, if someone has a fundamental pizza look around the neighborhood, probability that another contender will open a shop and take some of his business is a danger. The huge risk is the present enemy organizations which make effective things for clients(Mina, 2000). Furthermore, the organization stressed over the potential perils which sway on the generation strategy of the organization. In addition, unfavorable changes to laws, higher costs, and changes in client slants other possible threats. Also, perceiving threats help the administration of a business to avert unsafe outcomes. To keep the potential risks, the organization should plan and execute suitable frameworks(Svensson & Wagner, 2011).

The SWOT matrix analysis and TWOS matrix analysis give help the organization to choose and focus on their present business segment situation. In addition, with the help of the SWOT matrix analysis and TWOS matrix analysis, the organization can coordinate short, medium and whole deal destinations. Moreover, the temporary destinations cover the key course of action to adversary organizations(Bensoussan & Fleisher, 2013). Obviously, the medium-term destinations join the positive circumstances to develop new threats, for instance, strong relationship. Finally, the organization can conduct their whole deal attractive procedure through the outcome of SWOT matrix analysis and TWOS matrix analysis. In addition, the SWOT matrix analysis and TWOS matrix analysis help recently created a restaurant to execute successful methodologies for assessing execution measurement change needs.

Conclusion

SWOT matrix analysis and TWOS matrix analysis both are playing a significant role in a start-up business as well as an existing business also. With the help of these SWOT matrix analysis and TWOS matrix analysis, an organization can carefully observe their market condition and level of performance. Moreover, through these SWOT matrix analysis and TWOS matrix analysis, a newly developed restaurant can improve their organizational performance and expand their business into a new level. However, the management of the newly developed restaurant should follow the SWOT matrix and TWOS matrix models in order to run and expand the business smoothly.

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