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GAP Analysis

GAP Analysis. Performance – Potential to Actual. Group F. Aqeel Ahmed Kokab Ishaq Sabila Shahzadi Mariam Mohsin Wahbeeah Mohti. Aqeel Ahmed. History. Introduced by Igor Ansoff Developed in1965 in his classic Corporate Strategy Still used today

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GAP Analysis

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  1. GAP Analysis Performance – Potential to Actual

  2. Group F Aqeel Ahmed KokabIshaq SabilaShahzadi MariamMohsin WahbeeahMohti

  3. Aqeel Ahmed

  4. 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”

  5. 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

  6. 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

  7. 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

  8. 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

  9. KokabIshaq

  10. Analyzing the Gap

  11. Perspectives • Two types of perspectives: • Tactical • Short Term • Dealt through the use of Marketing-Mix • Strategic • Long Term • Ansoff’s Matrix is used to bridge the gaps using strategies

  12. SabilaShahzadi

  13. 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

  14. 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

  15. 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

  16. 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

  17. 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.

  18. 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.

  19. Mariammohsin

  20. 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.

  21. 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 company’s product, with the use of marketing communications tools like advertising etc

  22. Product Development • New Products, Same Market • Reasons: • to utilise of excess production capacity, • counter competitive entry, • maintain the company’s reputation as a product innovator • exploit new technology, • to protect overall market share

  23. 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 company’s products and services, or new geographical areas in order to entice new customers

  24. 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.

  25. 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.

  26. 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.

  27. 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.

  28. 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.

  29. 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."

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

  31. WahbeeahMohti

  32. 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.

  33. 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

  34. 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--transformational factors and transactional factors. 

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

  36. Thank you

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