When you are forming a business concept the Market Gap Analysis is one of the most powerful tools known. As the name implies a Market Gap Analysis is used to find gaps in the marketplace that are not addressed by either a product or service. It is best if these analyses are not done by one person unless he is very good, rather it is better if it is done as a group. This would include a group of people having expertise in several different disciplines. A particularly powerful combination is engineering, marketing and sales personnel.
In use a Market Gap Analysis is a double edged sword, and must be carefully controlled, or it may get out of hand. To give you an idea of how powerful a Market Gap Analysis can be: A large corporation conducted one, and the results almost wrecked the company.
What they did was to hold the Market Gap Analysis in a seminar like setting at a corporate retreat. They combined the different disciplines that were endemic in a corporate body. This included the trio engineering, marketing and sales. The results were that they uncovered eleven viable market gaps capable of $100,000,000 in sales. Twenty-six gaps capable of $50,000,000, and so many smaller gaps that they didn’t even bother counting them. So many gaps were found that the corporation became paralyzed for months trying to decide which gap to address. This analysis resulted in several spin-offs as various key personnel quite the corporation to address many of the uncovered gaps themselves.
In actuality, the Market Gap Analysis is another name for a brainstorming session. In this case the participants are looking for a product or service their business can address. In setting one up a set of parameters should be followed. The first of these parameters should be the size of the gap; say your gap is capable of generating $100,000,000 in sales. The other parameters might include engineering, marketing, sales, accounting, and manufacturing. It can also include any other discipline you might want to add.
This device is useful for not only starting a business, but can be used by established businesses as well. The one thing that you must observe is keeping it under control as it is extremely powerful.