Within strategic management of business, 'gap analysis' is the process Essay

Within strategic management of business, 'gap analysis' is the process of asking where are we now, where do we want to be - Essay Example At the corporate level, there are challenges from the rival companies, unpredictability of the market, dynamic consumer behaviour, etc. Moreover, political situation of the twenty-first century involves the working of complex democracies together with dynamic economic trends. The recent wave of economic slowdown has helped us to discern the importance of strategy setting and analysis in the context of corporate governance. Strategic management is thus increasingly involving an analytical approach to understand what a company actually does in relation to what it can potentially do. Executive Summary Gap analysis is the process of exploring certain questions in relation to the company’s present, potential and future performances. The paper will examine analytical instrument by interrelating it with the concepts of the strategic management of business. Strategic management and gap analysis are explained. Interrelations between the two processes are chalked out. Case examples are discussed to elucidate these interrelations. The Analytical and Strategic Approaches Introduction: The following discussion would explain and analyse gap analysis and strategic management. Discussion: In economics and business, gap analysis is a sort of tool which would help a corporation to compare its real time performance with the performance it is potentially capable of. This analytical approach is rather question answer based and from the perspective of the company, the questions are: 1. Where are we now? 2. Where do we want to be? 3. How can we get there? Gap analysis helps the company to obtain critical information so that the frontiers of production probabilities are not compromised (Cummins, 2008). The sphere of strategic management, on the other hand, deals with the principle emergent and intended initiations taken in the context of corporate governance which would involve resource allocation and utilisation, performance enhancement and adjustment with the external environ ments (Nag, Hambrick and Chen, 2007). Further, strategic management would refine the company affairs at the level of fierce corporate rivalry (Hamel and Prahalad, 1994). Summary: 1. Discussion on gap analysis 2. Discussion on strategic management Relation between Strategic Management and Gap Analysis Introduction: The following section explores that how gap analysis facilitates the implementation of the concepts of strategic management. Discussion: The main points of strategic management are: 1. Process of strategy development 2. Linking strategic capabilities with the external environment 3. Strategically designing the management, production and marketing processes 4. Optimisation of fiscal performance (Johnson, Scholes and Whittington, 2008) Gap analysis helps the process of strategy development by finding out the difference between the company’s present and potential performances. Gap analysis thus facilitates strategic improvement of HR, R&D, logistics, etc. Gap analysis also relates to the company’s behaviour with respect to the external environment by monitoring its performance in the contemporary circumstances. Gap analysis considers all the processes and project life cycles involved in the functionary of the organisation, hence it helps to improve the management, production, marketing and fiscal activities. When the crucial question of quality control arises, benchmarking for the quest of optimal performance becomes mandatory and thus gap analysis becomes supplementary to the strategic management of business. (Camp, 1989) Gap analysis provides the company with a graphical aid that is used to communicate areas where the firm does not meet a benchmark. Process optimisation, which is a key