what is the difference between a first level and second level swot analysis

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Request for Question Clarification by answerguru-ga on 05 Jun 2003 08:43 PDT

Hello brooksy-ga,

Having worked extensively with the SWOT analysis technique I was a bit
puzzled by your question. Could you explain a little further or put
your question into context so that we can answer more accurately?

I did come across this SWOT analysis paper which discusses a first and
second phase but from my viewpoint it seems that this is just the
author's way of organizing their analysis further:

http://www.newham.org.uk/Library/Articles/Promoting%20NO.html


Thanks,
answerguru-ga

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Clarification of Question by brooksy-ga on 05 Jun 2003 09:06 PDT

For clarification the question I have to answer is :-

a)Produce a comprehensive first level SWOT of your business (or your
part of it)using your initiative to expand the external elements of
the SWOT

b)Explain what extra information you would need to turn it into a
second level SWOT and how you would go about getting such information

                               Regards Brooksy-ga

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Request for Question Clarification by omnivorous-ga on 05 Jun 2003 13:11 PDT

Brooksy --

There are several ways to go from a 1st to a 2nd level SWOT analysis
-- depending on your situation:

1.  a large corporation (Pepsico) may want to go from corporate level
to business unit level (Taco Bell, Pepsi, etc.)
2.  even a single-market business may want to go from corporate to
departmental definitions (how does IT or production or sales compare
to the competition)?
3.  companies often start with a relatively simple analysis of
marketing/financial/manufacturing/research & development/cost/service
vs. competition, then go to specific details.  Here a variety of
techniques are used to get to specific numeric comparisons.  One
popular tools is value-chain analysis, which looks at what customers
value the highest.
4.  Yet another way to take SWOT analysis to another level is to look
at internal analysis for the 1st level, then consider changes in
technology, customer requirements, demographics, etc.

If you'd like, I can provide references to each.

Best regards,

Omnivorous-GA

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Clarification of Question by brooksy-ga on 09 Jun 2003 04:38 PDT

F A O  omnivorous-ga

            I would much appreciate it if you could provide the
references you mentioned

                                    Regards brooksy-ga

Brooksy - -

The reason for conducting a SWOT
(strengths/weaknesses/opportunities/threats) analysis is to develop
actionable information on your position against competitors.  Very
typically companies have a good general idea where they are positioned
but by going deeper in a level-by-level analysis they can build a
detailed picture of how customers view the company by segment; which
departments are providing key strategic advantage; and where changes
in technology or markets are having the most-dramatic impact.


QUANTIFYING YOUR BELIEFS
=========================

In the following analysis, James Manktelow provides an example of a
SWOT analysis for a startup small consultancy:
Mind Tools
"SWOT Analysis" (James Manktelow, undated)
http://www.mindtools.com/swot.html

In each of the areas cited, a second-level SWOT analysis would ask for
more details - - and the more quantifiable the numbers are the better.
 To a statement such as: "Our lead consultant has strong reputation
within the market" it can be asked:
* who are the top 3 consultants in that market?  Can you rank them?
* what sub-markets have the highest possible returns from expertise?
* what 3 companies are your most-likely competitors?
* what are the 3 major issues for potential customers?
* what was the pricing on the last 10 deals that we lost?


CORPORATE - AND DEPARTMENTAL SWOT
====================================

In this discussion of levels of strategy, Prof. Norman Sheehan's notes
show that a SWOT analysis can go several levels deep.  For Pepsico,
there's a corporate level strategy but also one for business units
(Taco Bell, Pizza Hut, KFC and the beverage business all having
different competitors and structure).  Each business unit can then
have a third level SWOT for functional units (marketing, production,
HR, finance, purchasing).
College of Commerce, University of Saskatchewan
"Strategy Basics I" (Prof. Norman Sheehan, Dec. 9, 2002)
www.commerce.usask.ca/faculty/ sheehan/C438FO2-12Sep02.ppt

A detailed functional checklist was created for Trade New Zealand on
applying a SWOT analysis by a consulting firm.  You may find it useful
in breaking down functional units:
GLOBAL Information Research & Retrieval, LLC
"SWOT Analysis"
http://www.searchitright.com/docs/10427%20swot%20analysis%20A4.pdf



EXTERNAL ANALYSIS
==================

The state of North Carolina's Department of Transportation has a good
6-page list of the types of questions that should be asked in looking
at government departments.  It's "second level" analysis is really
covered on the 5th page of this document, in which it recommends
looking outside to see how changes in travel habits; trends in
privatizing; and innovations in other government activities are
changing perceptions:
North Carolina Department of Transportation
"SWOT Analysis"
http://www.ncdot.org/financial/productivity/CPI/CPIToolbox/SWOT.pdf


CUSTOMER SEGMENTATION
========================

Even a single-product company provides a portfolio of 'products' to
customers - including pre-sales support, technical support, quality
level.  The situation becomes more complex with multiple products. 
And even more complex with different types of customers who will value
each product differently.

To get more precise reading of customer attitudes, a SWOT analysis is
often followed up with customer surveys.  One of the most-popular
methods is "value chain analysis," as noted by AWARE, a U.K.
consulting company:
AWARE
"SWOT Analysis and Value Chain Analysis" (undated)
http://www.marketing-intelligence.co.uk/aware/services/swot.htm

For an introduction to value chain analysis, this brief by Bradley
Gale is a good one, 
"Measuring and Improving Customer Value," (undated)
http://www.cval.com/Gale/ISBM.RTF  


Google search strategy:
"SWOT analysis" + level
"SWOT analysis" + "value chain"


These tools sometimes seem arcane in the classroom but are important
in building an understanding with a company of where its real
strategic advantages are.  Often the optimal strategy strives to lead
the industry in only two or three areas, while minimizing investment
in "non-critical" functions.

Best regards,

Omnivorous-GA