Gap analysis that can be applicable to the organizational system at a glance

Introduction

As a business owner, you already have some possible solutions in mind. However, before you choose a best solution, you need to identify what needs to be done to meet this objectives.

This is where Gap Analysis is very useful. This simple tool helps you identify the gap between your current situation and the future state that you want to reach, along with the tasks that you need to complete to close this gap etc

By definition,

  • Gap analysis is used to identify strategic and operational gaps in performance
  • It analyses the gap between the current capabilities of your company and its future development
  • ’’What are we doing today and how will this lead us to our next goal?’’

Gap analysis is a standard tool in strategic planning that are tailored towards:

  • Product/market matrix
  • Gap
  • Strategic management
  • Portfolio analysis
  • Added value etc

Strategic and Operational gap

Strategic gap:

  • deviation from the potential core business value
  • (= development limit)
  • Is bridged by additional strategic measures such as the development of new products / market combinations

Operational gap:

  • distinguishing between the performance and competitive gaps
  • both work together to make up the operational gap; the level reached would be the potential core business(the actual value is the core business)
  • Is bridged by utilizing all resources (optimizing existing core business)

Performance gap and Competitive gap as part of Operational gap

  •        Performance gap: as part of the operational gap can be bridged by a realistic view of all rationalization potential is subjected to an analysis of generated income by revenue
  •        Competitive gap: as part of operational gap is bridged by exhausting every resource (beyond the rationalization potential)

Advantages and Disadvantages of Gap analysis

Advantages:

  • shows the first rough analysis of strategic and operational gaps
  • the basis for further detailed analysis procedures
  • early warning system

Disadvantages:

  • no assessment function
  • doesn’t include include any recommended next steps
  • exact values aren’t determoned
  • no consideration of environmental dynamics
  • misunderstandings or misinterpretations

EIGHT STEPS OF GAP ANALYSIS

  1. REVIEW: Create a coordinate system
  2. TARGET DEFINITION: List strategic objectives at any given time and the way to get there
  3. PRESENT STATE: Extrapolate the current state
  4. DEVELOPMENT: Present the development by using operational actions
  5. OPERATIONAL GAP: Determine the operational gap
  6. STRATEGIC GAP: Determine the strategic gap
  7. ACTIONS: Develop strategic measures for bridging the strategic gap
  8. REVIEW SYSTEM: Review operational and strategic actions regularly.

Thank you

About the author: Zsanett

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