when to use a gap analysis
companies should perpetually evaluate the products it offers the customers it serves the market need it fills and the efficiency of its operations however there may be certain times when a more formal gap analysis is warranted these times include benefits of gap analysisbecause gap analysis can be used in an assortment of ways it carries with it a wide variety of benefits each benefit listed below may pertain to only one specific type of gap analysis still companies performing gap analysis may experience gap analysis in finance asset managementgap analysis is also a method of asset liability management that can be used to assess interest rate risk irr or liquidity risk excluding credit risk it is a simple irr measurement method that conveys the difference between rate sensitive assets and rate sensitive liabilities over a given period of time this type of analysis works well if assets and liabilities are composed of fixed cash flows because of this a significant shortcoming of gap analysis is that it cannot handle options as options have uncertain cash flows consider a situation where a company wants to make an investment but wants to ensure that it has enough capital on hand to cover contingent situations the company can review cash flows determine risks and assess where potential cash flow shortfalls may occur this is especially prevalent in long term projects high risk projects or projects sensitive to macroeconomic or external forces example of gap analysisfor years gamestop corp held its place in the market as a competitor in the video gaming industry customers could enter a physical location to either trade in video games from their existing collection or buy games consoles or gaming merchandise there is little public disclosure regarding the analysis or strategy performed by company management however in july 2022 the company released its non fungible token nft marketplace allowing gamers creators collectors and community members to buy and sell nfts 1 though this business endeavor was launched primarily relating to artwork the marketplace is expected to expand into gaming endeavors with a variety of nft usages to have made this business decision gamestop could have performed a gap analysis it could have though the ultimate internal discussions around the nft marketplace are not known one can infer that gamestop performed a gap analysis to understand that its existing position as a brick and mortar store could be enhanced with a new digital marketplace 1