Gap analysis is used to find out the gap
between a companies potential and its actual standing in the market. There will
always be a difference in what the company desires and what it has achieved.
Step 1) Finding the gaps- The very first
and most important step in the process of Gap analysis is finding the gaps
here
can be gaps in market segmentation, wherein a market segment which was targeted
has not shown interest, or another market segment exists which may give even
better business. The competitive landscape might be changing and there may be a
gap in the companies perceived competition and the actual competition that
exists in the market. There may be a gap in profit expectations and actual
profit realization.
Step 2) Narrowing down on key variables-
If
the gap is in market segmentation, then what is the market segment which you
would like to target. This new market segment is the key variable. Similarly,
what are the factors causing the downfall of profit, and what is the key
variable responsible for profits. The key variable in pricing may be raw
material cost or transportation cost.
Step 3) Implementing a strategy to cover
the gap- Customer focused strategy – Gaps may be
at customer end and a customer may expect better service, loyalty programs and
other intangibles from the company. Thus a strategy for gap analysis may be customer
focused and may involve actions which improve the customer experience for the
company.
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