What is 'Strategic Gap Analysis'

Strategic gap analysis is an evaluation of the difference between desired outcome and actual outcome, and what must be done to achieve a desired goal. Strategic gap analysis attempts to determine what a company should do differently to achieve a particular goal by looking at the time frame, management, budget and other factors to determine where shortcomings lie. After conducting this analysis, the company should develop an implementation plan (also known as an operational plan) to eliminate the gaps.

Breaking Down 'Strategic Gap Analysis'

A strategic gap analysis allows a company or organization to determine whether it is getting the best return out of its resources and abilities. It identifies the gap between the application of resources and the best possible result from that application of those resources. A strategic gap is the result if one subtracts what a company must do from what a company is doing. As such, performing a strategic gap analysis can point to potential areas for improvement and what resources are required to achieve an organization's strategic goals.

Strategic gap analysis stems from a variety of performance assessments, most notably, benchmarking. When the general performance of an industry or endeavor is known then it becomes possible to use that benchmark to determine whether a company's performance is acceptable or if it needs improvement. Such a comparison, with a strategy for improvement in mind, forms a strategic gap analysis. From there, a company or organization has the tools and data necessary to allocate resources, such as money, time and personnel to seek out a specific outcome.

Many businesses and other organizations fail to plan strategically. That means they have the capabilities and competencies to achieve their basic business targets but fail to realize their full potential. A strategic gap analysis would help such a business or institution bridge the gap between their current and potential positions.

Strategic Gap Analysis Example

If a small mom and pop restaurant wanted to become a top tourist destination but currently only served locals, a strategic gap analysis would look at the changes required for the restaurant to meet its goals. These changes might include relocating to an area with more tourists, altering the menu to appeal to out-of-town visitors, hiring more staff so the restaurant's hours become more convenient for travelers, and so on. The analysis would also determine how to make these changes happen. If a business doesn't know where it stands in relation to its goals, it is not likely to achieve them.

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