Gap Analysis - For Business Growth

Gap Analysis - For Business Growth

The “gap” in the gap analysis process refers to the space between “where we are” as a part of the bu

The “gap” in the gap analysis process refers to the space between “where we are” as a part of the business (the current state) and “where we want to be” (the future state or desired state).

In some situations, organizations may not be able to realise their full potential if they aren’t utilising their assets, money, and technology to the fullest. An investigation of the gaps can be useful here. It is possible to compare the company’s present performance with the industry’s average performance expectations once you have an understanding of them. The gap analysis is based on this comparison. Such analysis can be carried out at either the operational or strategic levels of an organisation.

Gap Analysis is a process that helps businesses and organisations to determine how to best achieve their goals. It draws attention to flaws and areas for improvement by contrasting the situation with an ideal situation or set of goals. Organization, business direction, business processes, and technology are frequently the subjects of gap analyses. While performing gap analysis, there are 4 types of gap analysis:-

  • Concrete gap analysis,
  • Conceptual gap analysis,
  • Strategic gap analysis and
  • Operational gap analysis.

Concrete gap analysis looks at the real world and uses real facts and data for doing the analysis. Conceptual one that examines hypothetical scenarios and needs to make assumptions about which parameters to use. A gap analysis can be strategic and focus on the overall organization and the planning and execution at that level, comparing a company’s strategy to that of its competitors. A company can then absorb the best components of its rivals’ strategies and incorporate these components into the most effective elements of its own existing plan or it could be operational, concentrating on the regular tasks carried out by a team or department. There is no need to create assumptions because both approaches are grounded on actual circumstances.

The most common type of gap analysis, is performance analysis looks at your company’s specific goals and identifies how far you need to go to achieve them. It also pinpoints what changes can close the gap.

For Business, to Consumer (B2C) companies/organizations Market gap analysis method is used. An approach to finding sales opportunities where demand exceeds supply is to do a market gap study. These evaluations, which can be carried out internally or externally, can help an organisation base decisions on market data rather than conjecture. A market gap analysis is proactive rather than reactive, in contrast to market research. Direct-to-consumer (B2C) businesses commonly profit from this strategy.

Manpower gap analysis helps you make more informed decisions about staffing and budgeting. It looks at things like employee on boarding, off-boarding, and training to determine how to help your employees meet performance goals. Profit gap analysis is often performed when your company overestimates profit projections. It helps determine what factors may have negatively impacted your profits, and how to proceed to ensure you meet revenue goals in the future.

How to identify Gap analysis?

  1. Analysis of your current state
  2. Identify the ideal future state
  3. Find the gap solutions
  4. Compare your current state with the ideal state
  5. Create and implement a plan to fill the gap

Advantages and Drawbacks of a Gap Analysis

Due to the numerous advantages, gap assessments may offer businesses and organisations, they are a widely employed tool. The following are some of these advantages:

  • An understanding of areas that need to be improved, such as effectiveness, goods, profitability, procedures, customer happiness, performance, involvement, and competitive advantage.
  • Confirming the completion of project requirements
  • Identifying and addressing weak points and flaws
  • Identifying discrepancies between perception and reality
  • Supplying data to help decision-makers, which may result in better decisions
  • Locating the optimal locations for resource and energy deployment
  • The ranking of needs
  • The outcomes of gap analysis are simple and easy to comprehend when properly carried out.

Some loopholes related to the gap analysis process include the following:

  • The knowledge and tenacity of the individuals involved in the process determine whether it is completed successfully.
  • The technique may uncover some causes, but if it stops short of addressing all of the causes, the offered solutions may overlook the complexity lurking behind them or fail to address their true root causes.
  • For example, a study revealed that salespeople aren’t promoting new goods enough without explaining why and when while evaluating sales success.
  • Due to the frequent movement of the ground, the analysis may be incorrect (especially in large organisations or in fast-moving industries)

To assist you to close the gap, many tools are available. To keep your firm going forward, visualise and record each phase of your gap analysis using tools like the McKinsey 7Ss, Nadler-Tushman Congruence Framework, SWOT Framework, and PESTEL Framework. The gap analysis process is typically the responsibility of business analysts, project managers, process improvement teams, or management in more prominent organisations. But anyone can go through the process with a little instruction and a well-made template. See how Gap Analysis can help you be more effective.

Keywords:  Gap Analysis tool, Gap Analysis, B2C

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