GAP Analysis

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GAP Analysis

• Performance Potential to Actual

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Group F

• Aqeel Ahmed
• Kokab Ishaq
• Sabila Shahzadi
• Mariam Mohsin
• Wahbeeah Mohti

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Aqeel Ahmed
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History

• Introduced by Igor Ansoff
• Developed in1965 in his classic Corporate
  Strategy
• Still used today
• helps understand the gap between where we are
  currently and where we would like to be
• Helps develop what he called gap reducing
  actions

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GAP Analysis - Defined

• In Business and Economics
• tool that helps a company to compare its actual
  performance with its potential performance
• "Where are we?" and "Where do we want to be?
• Comparison with the concept of Production
  Possibility Frontier

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The Goal

• To identify the gap between the optimized
  allocation and integration of the resources and
  the current level of allocation
• Provides the company with insight into areas
  which could be improved
• Involves determining, documenting and approving
  the variance between business requirements and
  current capabilities
• Gap analysis naturally flows from benchmarking
  and other assessments
• Performed at the strategic or operational level
  of an organization

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Usage Gap

• The gap between the total potential for the
  market and the actual current usage by all the
  consumers in the market.
• market potential
• existing usage
• Current industrial potential

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Market Potential Vs. Existing usage

• Market Potential is the maximum number of
  consumers
• determined by market research
• may sometimes be calculated from demographic data
  or government statistics.
• The existing usage by consumers makes up the
  total current market, from which market shares
  are calculated.
• Usually derived from marketing research
• May be available from figures collected by
  government departments or industry bodies.
• The 'usage gap' is thus
• usage gap market potential existing usage

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Kokab Ishaq
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Analyzing the Gap
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Perspectives

• Two types of perspectives
• Tactical
• Short Term
• Dealt through the use of Marketing-Mix
• Strategic
• Long Term
• Ansoffs Matrix is used to bridge the gaps using
  strategies

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Sabila Shahzadi
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Gap Analysis In Marketing Perspective

• Involves analyzing current market offering to
  assess the extent to which they meet customer
  demands
• Demand side gaps involve a market situation where
  consumers are not satisfied buying what is
  available
• Because the level of service provided is not
  adequate
• or because the offering is too expensive.
• Supply side gaps involve firms that provide
  services that are needed, but ones that can be
  met elsewhere at lower prices

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Planning Gap Its Elements

• This shows what is needed of new activities in
  general and of new products in particular.
• The three main elements of this gap are
• Usage Gap
• Product Gap
• Competitive Gap

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Usage Gap

• The gap between the total potential for the
  market and the actual current usage by all the
  consumers in the market.
• Market potential
• Existing usage
• Current industrial potential

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Market Potential Vs. Existing usage

• Market Potential is the maximum number of
  consumers
• determined by market research
• may sometimes be calculated from demographic data
  or government statistics.
• The existing usage by consumers makes up the
  total current market, from which market shares
  are calculated.
• Usually derived from marketing research
• May be available from figures collected by
  government departments or industry bodies.
• The 'usage gap' is thus
• usage gap market potential existing usage

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Product Gap

• It represents that part of market from which the
  organization is excluded because of product or
  service characteristics.
• Also known as the Segment or Positioning Gap.

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Competitive Gap

• Competitive gap is the share of business achieved
  among similar products, sold in the same market
  segment, and with similar distribution patterns -
  or at least, in any comparison, after such
  effects have been discounted.

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Mariam mohsin
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Ansoff Matrix and Gap Analysis

• Ansoff matrix is a useful framework for looking
  at possible strategies to reduce the gap between
  where the company may be without a change in
  strategy and where the company aspires to be
  (Proctor, 1997).
• It is used as a model for setting objectives
  along with other models like Gap analysis etc.

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Market Penetration

• current products
• existing customers
• to increase sales without drifting from the
  original product-market strategy
• three ways of penetrating
• by gaining competitors customers
• improving the product quality or level of service
• attracting non-users of the products or
  convincing current customers to use more of the
  companys product, with the use of marketing
  communications tools like advertising etc

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Product Development

• New Products, Same Market
• Reasons
• to utilise of excess production capacity,
• counter competitive entry,
• maintain the companys reputation as a product
  innovator
• exploit new technology,
• to protect overall market share

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Market Development

• Attracting new customers for its existing
  products.
• Often involves the sale of existing products in
  new international markets
• This may entail exploration of new segments of a
  market, new uses for the companys products and
  services, or new geographical areas in order to
  entice new customers

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Diversification

• Moves out of its current products and markets
  into new areas.
• It is important to note that diversification may
  be into related and unrelated areas.
• Related diversification may be in the form of
  backward, forward, and horizontal integration.
• Even unrelated diversification often has some
  synergy with the original business of the
  company.

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SWOT Analysis and Gap Analysis

• A SWOT analysis and a GAP analysis are types of
  business reports used to evaluate the current
  position of a business in relation to its
  potential success.
• While both assessment reports are compiled with
  the intent of fostering future growth, there are
  likenesses and differences between the two.

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Features

• SWOT analysis, which stands for "strengths,
  weaknesses, opportunities, threats,"
  compartmentalizes a business' strengths,
  weaknesses, opportunities and threats, from both
  an internal and external perspective.
• Gap analysis assesses the current position of the
  business in the marketplace, the desired
  position, and the "gap" in between, which unfolds
  as a plan of getting from A to B.

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Strategic and Tactical Planning

• Strategic planning is shaping specific
  objectives, such as "gaining 50 percent of the
  market share within five years." Tactical
  planning involves laying out the specific steps
  and procedures to achieve the strategic plan's
  objective(s). A SWOT analysis is used to develop
  strategy, while a gap analysis involves tactical
  planning.

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Content

• While a SWOT analysis evaluates all aspects of a
  business, including finance, operations,
  marketing, and human resources.
• A gap analysis is primarily focused on marketing,
  which includes price, product, promotion, and
  distribution.

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Present and Future

• A SWOT analysis presents current external and
  internal business information that describes the
  company's current position in the marketplace,
  useful for management to shape strategic plans.
• A gap analysis presents the company's current
  position, future standard, and the steps between
  intended to lead the company from "point A to
  point B."

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Distribution

• Both reports are compiled and used by top
  management. Both reports are for internal use,
  and are distributed to shareholders or other
  external

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Wahbeeah Mohti
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The Gap Analysis Technique

• Identifying Current Performance Once a problem
  has been identified, the current state must be
  documented.
• Identifying Desired Performance and Gap
  identifying the optimal state requires stating
  the performance in very specific terms so it can
  be compared against actual operations.Addressing
  the Gap Gap analysis results typically report
  both quantitative data as well as qualitative
  results. that can be used in proposing solutions
  for closing the gap and improving performance.

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Tools for Gap Analysis

• Practical Definition The benefit of gap analysis
  is that, by identifying the gap, it is easier to
  form a plan of action to mitigate that gap
• Requisite information
• Objective understandings
• Analyst know about real assets
• Understand the barriers and challenges

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The use of Gap Analysis

• McKinsey 7-S Model The 7-S model outlines seven
  groups Strategy, Structure, Systems, Style,
  Staff, Shared Values and Skills. 
• Burke-Litwin casual model created by W. Warner
  Burke and George H. Litwin, is a model of
  organizational performance and change. The model
  focuses specifically on change management.
  Variables are divided into two groups--transformat
  ional factors and transactional factors. 

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Con

• Nedler and Tushman Org. Congruence model Most
  popular and easy to implement.
• Variable divided in to three groups
• input,
• Transformation
• output

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• Thank you