mark 364 - gap analysis - chp6

7/31/2019 Mark 364 - Gap Analysis - Chp6

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GAP ANALYSIS

Chp 6 with Duane Weaver


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OUTLINE

Sources of Gaps

Types of Gaps

Combined Channel Gaps Closing Demand-Side Gaps

Closing Supply-Side Gaps

Gap Analysis Template


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Sources of Gaps

Key questions:1. What non-valued functions can be eliminated without

damaging customer or channel satisfaction?

2. Are there to be any redundant activates? Which of them couldbe eliminated to result in the lowest cost for the entire system?Is there a way to eliminate, redefine, or combine certain tasksin order to minimize steps in a sale or reduce its cycle time?

3. Is it possible to automate certain activities in a way thatreduces the unit cost of getting products to market, eventhough it will lead to increased fixed costs?

4. Are there opportunities to modify information systems toreduce the costs ofprospecting, order entry, or quotegeneration activities?


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Sources of Gaps

Most common Gaps due to:poor thought about target end-users demands for service outputsand the most cost effective manner of delivering them.

Environmental Bounds Local legal constraints Sophistication of local physical and retailing infrastructure E.g.?

Managerial Bounds Lack of knowledge about channel Corporate wide channel savings may create gaps in specific

channels (E.g.: inventory for Europe)


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Types of Gaps

DEMAND SIDE: ServiceValue Gap SOSSOD too much service output Surfeit of service not valued by customer (Byerlys)

and thus profits too low or price too high Check Service Output by Service Output

Check Segment by Segment


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Types of Gaps

SUPPLY SIDE: when total cost of allchannel flows jointly is too high. Signs:

Inventory found everywhere in channel Too little investment results in inefficient outdated

approaches

Not enough of one channel flow (bottlenecks)

NOTE:It is possible to have one channel flow priced too high ifit enables the other channels to perform more costeffectively such that the entire flow is lower-priced.


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Combined Channel Gaps

See Table 6.2 p. 147

If gap is cost-side with right amount of service outputsthen: do not reduce or increase service output whilstreducing costs.

If there is a demand-side gap with too low a service outputlevel combined with high cost supply-side gap, do not cutservice provision to reduce costs.

Imperative to have proper identification of the source of

the gapdo not just use the first obvious problem.Understand the segment well.

See Figure 6.3, p. 149


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Closing Demand-Side Gaps

1. Offer multiple, tiered service output

levels to appeal to different segments

1. Expand orretract amount of service level

output to the target market

1. Altering the list of segments targeted (re-segmentation by channel flow efficiencies)


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Closing Supply-Side Gaps

1. Changing roles of current channel

members

1. Investing in new distribution technologies

to reduce total channel flow costs

1. Introducing new distribution function

specialists to improve the function of the

channel


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Gap Analysis Template

See Table 6.3, P. 154

Demand Gaps (first line)

Supply Gaps (second line)

Target-Segment Specific

Like a SWOTbut rather:environmental and managerial constraints, Desired

Outcomes, Tactics to close, and predicted channelbehavior changes


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THANK YOU!

mark 364 - gap analysis - chp6

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