Gap analysis is used to find out the gap between a companies potential and its actual standing in the market. There will always be a difference in what the company desires and what it has achieved. Or if the company has achieved, what it desires, it needs to upgrade its objectives. In all such cases, gap analysis is used. Gap analysis helps the company in determining the steps that need to be taken to reach the desired objective from the current state. The process of gap analysis is as follows.
Step 1) Finding the gaps – The very first and most important step in the process of Gap analysis is finding the gaps. There may be many types of gaps. There can be gaps in market segmentation, wherein a market segment which was targeted has not shown interest, or another market segment exists which may give even better business. The competitive landscape might be changing and there may be a gap in the companies perceived competition and the actual competition that exists in the market. There may be a gap in profit expectations and actual profit realization. Due to unseen cost factors, profit realization may be much lesser than the forecasted value which shows that a gap exists which needs to be covered. Thus, finding the gaps and finding the right gaps is most important in Gap analysis.