GAP ANALYSIS
A business model to improve areas of weakness in a company
Gap analysis is as old as the hills. People have always been concerned about improvements by assessing where they stand today against a target of what they would like to achieve. However, the term gap analysis is relatively new and was conceived in the 1980s by researchers at the University of Idaho.
Gap analysis seeks to find the difference between the current level of performance of a company and where it would like to be. Gaps can be sought in different areas:
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Performance gaps with customers – satisfaction and loyalty scores, delivery times, delivery in part and in full, share of wallet.
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Product gaps – gaps in the product portfolio.
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Segment gaps – groups of customers who are currently not served.
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Geographical gaps – regions or territories that could be supplied but are not at the present.
The most common gap analysis for marketers is the performance gap with customers.
The diagram below shows a typical analysis from customer research showing scores out of 10 which measure the importance of various elements of a company's delivery performance and customers satisfaction with those components (also measured out of 10). In the example it is clear that there are lots of gaps that needs filling but the biggest is on availability of products.
The key to gap analysis is finding out what is important to customers and where your performance is relatively poor.
Once the gaps have been identified, they should be sorted into quick wins (things that are easy to correct and improve) and those which need substantial resource and will take a long time. This will create a plan of action for improvements.