What is Gap Analysis?



Gap Analysis is a tool for assessing the gap present between resource integration and optimized distribution and the current allocation level. In this, a company’s weaknesses, strengths, threats and opportunities are analyzed and suitable moves are decided upon.


To This End, Some Alternative Strategies Are Selected Based On

The Spread Of The Gap
Possibility Of Reduction

In case the gap is a narrow one, stability strategy is the most appropriate answer. But in the event that the gap is a wide one, and the reason behind it is environment opportunities, a company’s management can go for expansion strategy. If it is owing to past bad performance, experts can opt for retrenchment strategies.

Different Gap Types

When a professional refers to the phrase ‘strategy gap’, he is actually implying the difference between the desired performance and the actual one, as per the business’ objectives, vision, mission and strategy to attain them. The gap is a hindrance to the future performance of the business, its survival and growth in the market. All of this can impact the effectiveness and efficiency of the company.

Product/Market Gap: The gap between actual sales and budgeted sales is termed as product/market gap.

Performance Gap: This gap is the difference between actual performance and expected performance.

Manpower Gap: When a company requires a certain strength of labor, but the actual number of resources in the organization is lesser than that, it is known as manpower gap.

Profit Gap: This gap gets prominent when a change arises between a company’s actual profit and its targeted profit.


Some Other Courses of Action

When A Company’s Management Comes Across Any Of These Gaps, It Resorts To Any Of The Three Below Mentioned Strategies.

Do Nothing: This can be regarded even if it is the least implemented action.

Alter The Strategy: In order to minimize the gap between the forecast and objectives of a company, the entity can choose to change their strategy.

Redefine The Objectives: In the event of any variance between forecast and objectives, the top executives of the company must first check the practicality of its objectives and decide whether they are achievable and realistic or not. In case the objectives turn out to be too high to achieve, the firm needs to redefine them.

Any strategy-related change should be made after considering the fact that the gap is present between the proposed and present state of affairs.


Phases In Gap Analysis

Find Out the Current Strategy: The professionals need to identify the assumptions on which the present strategy is based.

Forecast the Future Environs: Get an insight into the presence of any inconsistency in the assumption.

Determine the Significance of Gap Between Future and Current Environment: Does the company need to alter strategy and objectives?

Be it anticipated profit, sales, overall performance or capacity, they always have their base in the past and present calculations and also in some amount of guess. Therefore, a gap may be seen quite naturally. But it may be large. In such circumstances, it is important to investigate it and take the necessary steps to eradicate it so that it does not have any negative impact.on the future of the company.

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