BSAD 113 GAP ANALYSIS Lars Perner, Instructor 1 GAP ANALYSIS Sources of gaps Types of gaps Solutions to gaps

BSAD 113 GAP ANALYSIS Lars Perner, Instructor 2 Gaps Sources Environmental  Legal  Infrastructure  Cost Managerial  Policies due to Distrust Poor integration Types Demand-side Supply-side

BSAD 113 GAP ANALYSIS Lars Perner, Instructor 3 Demand Side Gaps Service output supplied= output demanded SOS < SOD  Segment currently receives insufficient service  E.g., supermarkets not delivering groceries  E.g., same day delivery of specialty books SOS > SOD  Excessive service  excessive prices for any significant segment  “Wheel of Retailing”— stores keep adding services and lower priced alternatives then emerge  Where to draw the line—e.g., Costco

BSAD 113 GAP ANALYSIS Lars Perner, Instructor 4 Supply-Side Gaps Total cost of performing all flows is higher than needed E.g., travel agents E.g., neighborhood pharmacies

BSAD 113 GAP ANALYSIS Lars Perner, Instructor 5 Combined Gaps Cost/ Performance SOD>SOSSOD = SOS SOD < SOS No supply side gap (efficient) Room for higher price, more SO No gapRoom for lower price, less SO Supply side gap (excess cost) Too low value at too high cost SO demanded even at high cost Insufficient value

BSAD 113 GAP ANALYSIS Lars Perner, Instructor 6 Closing Demand-Side Gaps Multiple, multi-tiered services to different segments (e.g., Marriott and Courtyard) Adjusting current offering toward market balance Reconsider target market

BSAD 113 GAP ANALYSIS Lars Perner, Instructor 7 Closing Supply-Side Gaps Changing channel flow objectives Investments in efficiency Improvement of existing channel