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Alayna
Wood
Gap Analysis Explained: What is
Everything Strategy a Gap Analysis + Why Your
Internal/External Analysis, SWOT Strategic Plan Needs One
Action Planning
6-minute read
Competitive Analysis

Goal Setting

In This Article: Gap Analysis Defined:

What is a gap analysis? A gap analysis examines the key gaps in your organization’s
Gap Analysis Defined: 
current state – like capabilities, resources, or talent – you need to overcome to achieve
your desired future state. It requires comparing your actual business performance
When to Use a Gap Analysis
against desired benchmarks to identify performance gaps and capability gaps you must
fill to achieve your desired future state.
Areas to Assess for Your Gap
Analysis
A gap analysis is designed to help you identify what core competencies, resources, or
capabilities you need to achieve your bold vision of the future.
5 Key Components of a Gap
Analysis

What Is the Difference Between a

Gap Analysis and a SWOT
Analysis?


The three core questions you need to answer as you conduct a gap analysis are:

Where do we want to be in the future (our bold vision of the future)?

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local
do wegovernment? See
need to accomplish our newest
(or acquire) product,
to move from our current state to our bold
vision of theMadison
future? AI.
See Madison
today ((our AI
current state)?)
1. Where do we want to be in the future (our bold vision of the future)?
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2. What do we need to accomplish or acquire to move from our current state to our
bold vision of the future?

Free Trial It is an effective tool to help organizations determine what they are doing well, what
Alayna
they need to improve on, and what they are missing or need to invest in to achieve their
Wood
desired future.

Everything Strategy Keep reading as we break down the various elements of a gap analysis report and
outline how this tool is used in different sectors of business.
Internal/External Analysis, SWOT
Action Planning Your strategic plan is like a flight of stairs.
Competitive Analysis
A gap analysis is not merely a 2-step process that focuses on where the organization is
Goal Setting now versus where you want it to be in the future, but a fully thought-out action plan to
elevate your organization.
In This Article:
Think of your gap analysis as a flight of stairs–the bottom level where
Gap Analysis Defined:  you’re starting is your current state and your desired state is the landing of
the floor above. The steps in between that lead from where you are to where
you want to be are your action plan or strategy.
When to Use a Gap Analysis

Areas to Assess for Your Gap

Without the steps in between, you’ll never reach the next level. A gap analysis helps you
Analysis
measure and define each step of the staircase and create a strategy that will allow you

5 Key Components of a Gap

to climb to your desired future state in a steady and attainable manner. This ultimately
Analysis allows business to outline clear and realistic goals that they can meet incrementally to
achieve sustainable, long-term success.
What Is the Difference Between a
Gap Analysis and a SWOT
Analysis?

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

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Wood Download for Free

Everything Strategy
When to Use a Gap Analysis
Internal/External Analysis, SWOT
A gap analysis is best used when organizations seek to:
Action Planning
Develop a strategy to achieve a vision of success.
Competitive Analysis
Implement a change management process.
Goal Setting
Assess organizational performance or employee skills and training.

In This Article: It can also be a useful tool to audit your current processes, performance, or compliance
needs – like performing a compliance gap analysis to evaluate adherence to external

Gap Analysis Defined:

regulations
 and avoid fines.

A full analysis can help identify potential challenges, risks, or shortcomings when
When to Use a Gap Analysis
implementing organizational change. It helps organizations develop strategies to
address these gaps and ensure a smoother transition during change management and
Areas to Assess for Your Gap
Analysis strategic planning.

This tool identifies areas of strength and areas of improvement within an organization’s
5 Key Components of a Gap
Analysis performance, skills, or overall efficiencies and allows organizations to assess the skills
and competencies of their employees, and ultimately, identify gaps in knowledge or
What Is the Difference Between a training.
Gap Analysis and a SWOT
Analysis? This analysis helps plan targeted training and development programs to bridge the
gaps 
and ensure employees have the necessary skills to perform their roles effectively.

Further, it can be used to evaluate existing processes and identify gaps in efficiency,
effectiveness, or compliance. This allows organizations to prioritize process
improvements and implement changes to close the gaps and streamline operations. It
can also guide the allocation of resources and efforts towards streamlining overall
performance .

Gap Analysis Important Benefits in Any Planning Process

A gap analysis is helpful during any strategic planning process to help organizations
align what they currently have with what they need to achieve their long-term vision.
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A gap analysis can also be used to compare one’s own organization with
one’s competitors toAI.
Madison determine what gives their competitors an edge in the
industry.
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3 Benefits of a gap analysis to drive performance and
business improvement.
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Alayna
A gap analysis is important to your overall business strategy in several ways:
Wood
1. Surfacing Areas of Improvement
Everything Strategy It helps organizations and businesses pinpoint which aspects of their business
process or performance fall short of expectations and guides them in assessing
Internal/External Analysis, SWOT areas of improvement.

Action Planning 2. Resource Allocation

Resource allocation is an essential aspect of strategic planning and conducting
Competitive Analysis
a gap analysis before moving forward with your strategic planning process
Goal Setting ensures that you can determine the best way to utilize those resources
effectively.

In This Article: 3. A Place to Hunt for Goals

A gap analysis helps organizations determine realistic goals and define what is

Gap Analysis Defined: achievable. (This is not to say you can’t set lofty ambitions, but creating a
strategy informed by your own gap analysis tools allows you to set achievable
goals that bring you closer to your big, bold vision in a way that is sustainable
When to Use a Gap Analysis
and longer lasting.)

Areas to Assess for Your Gap

Analysis
Areas to Assess for Your Gap Analysis
It’s not enough to just say, “I want to earn $X amount of revenue by this timeframe” or
5 Key Components of a Gap “We want to be the leading provider of (insert service) in our market”.
Analysis

Those are fine goals to have – but they’re too vague to be useful in a gap analysis,
What Is the Difference Between a which calls for more defined targets. A gap analysis works best when your goals are
Gap Analysis and a SWOT
Analysis? specific.

A good starting point could be to focus on specific areas of your organization that need
improvement or development. A gap analysis can ultimately be used to look at both
internal and external factors or shortcomings within the organization regarding how the
organization meets customer or market needs.

Borrowing from the balanced scorecard method, you can break down your areas of
focus to these key areas in your organization, such as financial, customer, business
processes, and organizational capacity. Here are some more specific examples:

Skills of your staff that need improvement.

Roles within the organization that need to be filled.

Product gaps.

Market gaps.
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Market See our
gap analysis to identify newest
discrepancies product,
between actual and budgeted sales
and recognize underserved markets.
Madison AI.
Business processes or systems that need more efficiency.
See Madison AI
Technology use.
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Examples of gap analysis areas of focus.
By looking at specific focus areas, you can see which initiatives are proving successful
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Alayna versus what initiatives need improvement. We’ll go more into these examples below:
Wood
Performance gap analysis
Everything Strategy A performance gap analysis evaluates the difference between the performance level
that an organization currently holds versus its desired future performance. A few
Internal/External Analysis, SWOT
practical gap analysis examples:
Action Planning
Shipping and fulfillment times.
Competitive Analysis
Marketing performance data, like SEO rankings, web traffic, conversions.
Goal Setting
Sales conversion rates or lead conversion rates.

In This Article: Profit margins.

Customer retention data.

Gap Analysis Defined: 

When to Use a Gap Analysis

Areas to Assess for Your Gap

Analysis

5 Key Components of a Gap

Analysis

What Is the Difference Between a

Gap Analysis and a SWOT
Analysis?


Marketing gap analysis

This is a sector that assesses how well your product or company meets the needs of
the market or customers, whether by services or products offered. It analyzes gaps
 Looking for AI inbetween
local customer
government? See
expectations our
versus newest
company product,
fulfillment. A few practical
examples: Madison AI.

ProductSee Madisonopportunities.
expansion AI

Market expansion opportunities.

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Market segmentation.

As shown in the illustration above, here is what an example of a marketing gap

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Alayna analysis may look like:
Wood
Ideal Future State: Be a top 10 ranked project management software in the SaaS market
for the construction, architecture, and engineering space.
Everything Strategy
Current State: We’re currently ranked in the top 25 by independent reviewers and are
Internal/External Analysis, SWOT
currently outside of page 1 rankings for keyword searches on Google.
Action Planning
Action Item 1: Invest in a website overhaul emphasizing SEO-optimization to
Competitive Analysis
improve our brand visibility in Q1 of 2024.
Goal Setting
Resource requirements: An outside agency to manage our SEO and develop pages to
rank better. SEM to rank our site better until we earn organic rankings.
In This Article:
Action Item 2: Increase our organic brand presence by creating a content
Gap Analysis Defined: marketing strategy to feed a lead nurturing funnel from Q1 of 2024 to Q4 of 2025.

Resource Requirements: A content marketer to develop a holistic content marketing

When to Use a Gap Analysis
strategy and hard collateral that includes a library of blog posts, whitepapers, and
webinars.
Areas to Assess for Your Gap
Analysis
Action Item 3: Improve our independent rating from 18 to 8 in Q4 of 2025.

5 Key Components of a Gap Resource Requirements: 3 core new application features that are missing from our
Analysis
tech stack are required to break the top 10 threshold. This is a development investment
of $90,000.
What Is the Difference Between a
Gap Analysis and a SWOT
PR Strategy: Collecting user reviews and submitting them to commonly used software
Analysis?
ranking

sites to improve our ranking. This is a hard cost of $15,000.

Future State: Ranked in the top 10. BeSave

a top 10 ranked project management software
for the construction, architecture, and engineering space in 2026.

Skills gap analysis

This analyzes the current skillset of current employees versus the skills needed to meet
the growing demands or goals of the desired future state. This may assess training
needed for current employees or roles and positions that may need to be filled by new
hires or outsourced companies.

AI capabilities

Technological capabilities
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delivery capabilities

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Product gap analysis
See Madison AI
This analyzes the gap between features, pricing, and overall qualities of a product or
Services service
Strategic Planning against
& OKR Softwarethe customer
Clients needs
Whyand
Us the competition
Pricing in the market.
Resources It can
Sign In even
include product upgrades that haven’t been done by your competition, like utilizing AI
features in your software products.
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Alayna Product/market fit
Wood
5 Key Components of a Gap Analysis
Everything Strategy
There are a few different approaches one can take to perform a gap analysis, but in
general, it consists of these five main components:
Internal/External Analysis, SWOT
Action Planning

Competitive Analysis

Goal Setting

In This Article:

Gap Analysis Defined: 

When to Use a Gap Analysis

Areas to Assess for Your Gap

Analysis

5 Key Components of a Gap

Analysis

What Is the Difference Between a

Gap Analysis and a SWOT
Analysis?


Your organization’s current state

Once you know where you want your organization to go, you must assess the point
from which you’re starting.

Evaluate your current performance in the desired focus areas by gathering data,
conducting surveys, reviewing processes, and assessing the efficiency of your own
 Looking for AI incurrent
localprocesses,
government? See
systems, and our newest product,
resources.
Madison AI.
Your desired future state.
See Madison AI
Where do you want to see your organization in the next 3-5 years?
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Clearly define the goals and the level of performance you would like your organization
to achieve. You can base this on your levels of achievement or on your competition and
Free Trial how you’d like to gain an edge over them.
Alayna
Wood A careful analysis can provide a benchmark for comparison and define the gaps that
need to be filled.
Everything Strategy
Time frame to get there.
Internal/External Analysis, SWOT
It is also helpful to set timelines for achievement. How long do you expect (or hope) to
Action Planning
get to your future state? Set both long-term goals and short-term benchmarks to track
Competitive Analysis your progress along the way.
Goal Setting
The gap between where you are now vs. where you want
In This Article: to be.
Now that you’ve identified where you want to go and where you are, you can assess in
Gap Analysis Defined: 
which areas you’ve already met your goals and in which areas you still have work to do.
Within these, you can now determine the gaps and deficiencies in your organization. It’s
When to Use a Gap Analysis
also a good idea to consider the underlying causes of the gaps so that you can
determine how to move forward.
Areas to Assess for Your Gap
Analysis
When identifying your gaps, analyze the root causes that create them–maybe your
organization lacks the technology or human resources side, or you need to hire or
5 Key Components of a Gap
Analysis outsource people skilled in a specific area.

What Is the Difference Between a Conduct interviews, research, polls, or employee surveys to gain insight
Gap Analysis and a SWOT into your employees, customers, and stakeholders.
Analysis?


The strategy to bridge the gap.

Now that you’ve identified the gap and the cause, you can begin to build an action plan
to address it. This type of planning and strategizing can be done through various
methods, but generally, you should execute these three steps:

Set clear goals.

Identify resources needed.

Outline the steps that need to be taken to address the deficiencies.

Once the action plan is in place, be sure to implement regular reviews and find a way to
monitor your progress. Regular monitoring and evaluation help track the effectiveness
 Looking for AI inoflocal government?
your strategy See our
and help you determine newest
when to adjustproduct,
it. The gap analysis process
Madison
should be dynamic in orderAI.
to meet the changing needs of the organization.

See Madison AI
The Gap Analysis Tool – Frameworks and Approaches
Services There
Strategic Planning areSoftware
& OKR different elements
Clientsof a gap analysis to
Why Us consider
Pricing that would need
Resources Sign Invarious

tools. Conducting a gap analysis requires efficient organization of ideas and data points
using a gap analysis template. Use our free gap analysis template to begin your
Free Trial
Alayna process. After you fill out your template, you need to have a means of measuring
Wood progress and performance indicators.

There are different elements of a gap analysis to consider that would need various
Everything Strategy
tools. Here are a few helpful tips:

Internal/External Analysis, SWOT A SWOT analysis should be conducted before conducting any gap analyses. You
Action Planning really must know your core strengths.

Competitive Analysis The Mckinsey 7-S Framework is an approach to completing gap analyses.

Goal Setting
We’ve developed a gap analysis template you can use to assess your current
performance. Use our free gap analysis template to begin your process. After you
fill out your template, you need to have a means of measuring progress and
In This Article: performance indicators.


A strategic planning software is just what you need for the task! OnStrategy’s
Gap Analysis Defined:
strategic planning software allows you to track progress of your goals and
initiatives through OKRs, KPIs, and other methods of measurement. Assign
When to Use a Gap Analysis
certain people to tasks and make them the owners of tracking the performance
of their assigned tasks. You can also utilize a project management software to
Areas to Assess for Your Gap help keep projects aligned with your overall goals.
Analysis

5 Key Components of a Gap

Analysis

What Is the Difference Between a

Gap Analysis and a SWOT
Analysis?


What Is the Difference Between a Gap

Analysis and a SWOT Analysis?
When discussing a gap analysis, some people may think they are exactly like a
SWOT analysis. However, there are some general differences. A SWOT helps
companies determine their competitive advantages by assessing both their
internal strengths and weaknesses as well as external opportunities and threats.
 Looking for AI in local government?
A gap analysis, as we’veSee
stated,our
looksnewest
primarily atproduct,
the deficiencies the
organization has that prevents them from moving from its current state to its
Madison AI.
desired future state, and goes a step further by outlining the steps to bridge
See Madison AI
those deficiencies.

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A gap analysis is primarily forward focused, while a SWOT looks
at the current condition.

Free Trial
Alayna
Wood A gap analysis and SWOT analysis can be used together to perform a
comprehensive assessment and develop effective strategies for improvement.
As a SWOT identifies weaknesses in a company’s current strategy or business
Everything Strategy
process, it can be used with a gap analysis to pinpoint the gaps and areas of
improvement.
Internal/External Analysis, SWOT
Action Planning Strategic vs. short-term gap analysis.
Competitive Analysis
Strategic and dynamic gap analyses differ in a few ways:
Goal Setting
Purpose and scope
In This Article: A strategic gap assesses the needs and requirements for an organization to
achieve its vision and long-term goals.
Gap Analysis Defined: 
In contrast, a short-term, or “dynamic gap analysis” examines an organization’s
dynamic aspects and aims to improve efficiency, effectiveness, and agility in
When to Use a Gap Analysis response to changing circumstances – How must you change the short term to
meet your efficiency, effectiveness, and agility targets?
Areas to Assess for Your Gap
Analysis Timeframe and frequency of analysis

5 Key Components of a Gap A strategic analysis typically considers long-term or future-oriented gaps. It
Analysis examines the gaps between its current state and its desired state over an
extended period, often involving strategic planning cycles. Due to its long-term
What Is the Difference Between a focus, a strategic gap analysis is typically conducted periodically, such as
Gap Analysis and a SWOT annually or during strategic planning cycles.
Analysis?
A dynamic analysis, on the other hand, considers shorter-term gaps. It focuses
on identifying immediate or near-term gaps to improve specific processes or
systems within a relatively shorter timeframe. Dynamic analysis is often
performed more frequently and on an ongoing basis.

Level of detail
A strategic analysis often takes a broader perspective, encompassing the overall
organization and its strategic objectives. It provides a high-level view of the gaps
that need to be addressed to align the organization with its strategic goals.

A dynamic analysis tends to be more detailed and specific. It may involve

examining specific processes, functions, or systems within the organization,
dissecting them to identify gaps, and proposing targeted improvements.
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Conclusion
Madison AI.
Conducting a gap analysis is an essential step in developing and executing a
See Madison AI
strategic plan. It helps you understand where your organization currently stands,
identify areas of improvement, and bridge the gap between your current state and
Services Strategic Planning & OKR Software
future Clients
goals. By conductingWhy Us
a thorough Pricing and
analysis Resources
evaluation Sign In business
of your
needs, market trends, and skills, you can make informed decisions and
implement effective changes to propel your strategic plan forward.
Free Trial
Alayna A gap analysis can be an effective tool to help your team realistically assess the
Wood deficiencies in your organization that are currently interfering with your ability to
reach your future goals. It helps you create a clear, actionable strategy with
Everything Strategy attainable steps to bridging the gaps in your organization.

Read the next article, Gap Analysis Template to Elevate Your Strategic Plan for
Internal/External Analysis, SWOT
instructions and examples to assist you with your own gap analysis.
Action Planning

Competitive Analysis

Goal Setting

In This Article:

Gap Analysis Defined: 

FAQs
When to Use a Gap Analysis

Areas to Assess for Your Gap

Analysis How can a gap analysis elevate our
strategic plan?
5 Key Components of a Gap
Analysis

What Is the Difference Between a What tools do I need for a

Gap Analysis and a SWOT successful analysis?
Analysis?


What are the five elements of a gap

analysis?
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Everything Strategy

Internal/External Analysis, SWOT

Action Planning

Competitive Analysis

Goal Setting

In This Article:

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When to Use a Gap Analysis

Areas to Assess for Your Gap

Analysis

5 Key Components of a Gap

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