Gap analysis

Gap analysis

The Gap analysis, Potential, or gap analysis, is a classic tool of strategic planning. It gives an indication of whether a Company at the time of the analysis, Provision made to be able to your target expectations to be realised. For this purpose, two projections are carried out: a forecast of the target values, i.e., the desired result is estimated, and a forecast of the actual values, then, if no further strategic activities on the part of the Company is taken.

In this case, the base business sales, to realize the Enterprise without major changes can, while having the potential base business sales growth is recorded, which can reach the Company through operational interventions, such as employee motivation, time-adjusted measures. The discrepancy is referred to as an operational gap. In addition, it is of interest to you, what possible development could arise if not only the given Potential is fully exploited, but the Potential for the future, and changes, for example in the product area, by product innovations in the Considerations are not involved (new product/market combinations). The basis for such a potential analysis, the functional areas of a Company (e.g. production, sales, F&E) form.

Based on these Considerations is then to analyze the identified gap (gap), wherein, depending on the objective criterion of a turnover, profit, contribution margin gap etc. The Cap needs analysis, but to other instruments of strategic Management, such as the life-cycle concept, the portfolio analysis, the value chain, but also to empirically-oriented PIMS concept. Ultimately, a Strengths/weaknesses analysis should be carried out on this basis, the appropriate strategic decisions.

The Gap analysis is discussed in the literature is extremely controversial. In particular, the following points of criticism are stated

  • It is assumed that the development of the past continues and that also means in the future, it is the time stability hypothesis is based on.
  • Concentration of strategic Considerations on the existing business areas and neglect the overall view of a Company.
  • The focus on measurable performance indicators (sales, profit etc.) are neglected for the strategic Management of important qualitative variables.
  • Not sufficient attention is paid to business external developments

This Text is taken from the book introduction to the Strategic Management of Professor Hans Corsten, and Dr. Martina Corsten.