Strategic gap refers to the situation where actual performance levels are significantly different than the desired performance levels. The analysis of such situation for the gray areas to be recognized and to suggest what needs to be done to achieve the desired performance level or the strategic objectives is called Strategic Gap Analysis.

Why this gap does happens. This could be due to no of reasons. For example there could be a reason that objectives might not realistically determined. They may not be aggressively endeavored to achieve. Objectives may not be communicated properly to the concerned individual or like so many. The purpose of Strategic Gap Analysis is to identify the accurate reasons resulting incapability of the firm to achieve the objectives and further it is meant to rationalize the appropriate measures to remedy the situation and to meet the objectives. It also covers the assessment and allocation of required resources to achieve the goals.

More precisely strategic gap is the difference between firm’s current position and its desired position and to compare the two performance levels a powerful tool is Strategic Gap Analysis.

Many firms do not plan strategically. They travel without clear understanding of desired destination. In numerous instances such companies have more potential in the form of resources and competencies to achieve the hard targets but they remain unaware of their potential. Such firms need to use Strategic Gap Analysis between to assess their current position and their potential position.

There are following questions required to be asked for each element of strategic planning such as mission, market share, customer preference, financial strength, market value of share etc:

Where we are? – The answer would be the current position of the business or firm.

Where we want to be or we should be? – The answer would be the desired or potential position of the firm.[large]

In response to the second question quantity and quality of tangible and intangible resources is to be assessed. On the basis of this assessment a realistic desired or potential position of the firm is to be determined for each strategic planning element.

What are the critical issues? – The answer to this question would be the reasons or causes of the deviations from desired positions. The response will highlight the shortcomings.

How to overcome the deficiencies? – The reply to the question would be devising appropriate measures to get out of the current situation and to achieve the desired or potential position.

How to allocate the resources? – In response to this question, appropriate resources for each strategic planning element are allocated for the achievement of objectives.

Strategic Gap Analysis enables the company to rightfully determine the potential of its human, financial, and real assets and to wisely allocate the resources enabling it to achieve the desired targets.

The format below can be used to prepare one page Strategic Gap Analysis.

Strategic Planning ElementCurrent PositionDesired or Potential PositionReasons of DeviationsWay outResources