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GAPS, SWOT and Segments, Oh, My

Written by: Tim Schneider

Article Overview: SWOT is an acronym for strengths, weaknesses, opportunities and threats. When performed normally, this type of analysis yields almost cursory and useless results. Typical responses when looking at an organization as a whole include comments about having good people (a strength), lacking suitable space (a weakness), growth of a business in a strong economic market (an opportunity) or the presence of a competitor (a threat). This provides a brief snapshot of where an organization is and what might be on the horizon in very high overview. This approach contains only the singular dimension of flat area.

GAPS, SWOT and Segments, Oh, My

Most managers and leaders are familiar with the common organizational analysis tools of SWOT and Gap but these tools are largely ineffectual when not properly segmented. Using a segmented approach will deliver greater value to these time worn tools.

SWOT is an acronym for strengths, weaknesses, opportunities and threats. When performed normally, this type of analysis yields almost cursory and useless results. Typical responses when looking at an organization as a whole include comments about having good people (a strength), lacking suitable space (a weakness), growth of a business in a strong economic market (an opportunity) or the presence of a competitor (a threat). This provides a brief snapshot of where an organization is and what might be on the horizon in very high overview. This approach contains only the singular dimension of flat area.

Gap analysis is even more of a simplistic approach. It is linear and clearly defines where an organization is and where it wants to be. The gap between the then and now represent a self-writing action plan when a company identifies how to move from the now to the future. Like SWOT, it is flat and, unique to gap, it is a single straight line.

Now imagine these analysis tools in three dimensions with depth and breadth added. That is what adding segmentation to these tools will achieve. Starting with SWOT, instead of looking at the organization as a whole, segmentation forces the same analysis except broken down in the key operating areas of the company. First the organization defines the key operating areas and many of those are common to all organizations. Typical ones include human talent, financial, facilities, technology, core products and services and regulatory or legal issues.

For example, the training department at High Stakes Motors wants to begin the strategic planning process for 2008 and rather than beginning with a SWOT analysis of the department, they segment their approach and begin with the people in the department. They determine that there are some core strengths and individuals who could be called strong. They also determine there are some general deficiencies and weaknesses among their staff. They look at opportunities to improve personnel skill levels and cross-train key team members and they identify the threats of organizations that have higher compensation or benefit packages. From this view, the management team for the training department at High Stakes Motors can craft a 2008 plan that capitalizes on their strengths, addresses the weaknesses, captures some opportunities and strategically positions to minimize the threats.

Wash, rinse and repeat for all the major segments of the High Stakes Motors training department for all aspects of their operation including their facilities, the technology used, strategic partnerships, financial structure and core training offering. The end result is a significantly more detailed, more useable and more reliable way of looking at this operation.

Now imagine a Chia pet. One that has been watered and is beginning to grow a bit. That is what we are going to create instead of a linear gap analysis. With the center point of segmented gap being the “where we want to be” mark, the lines out from that point will represent where we are based on the same segments used in the segmented SWOT analysis. So, for the High Stakes Motors training department we have one line to the center for technology, one for human talent, one for core products and services offered, one for customer service level, one for facilities and so forth. Each line begins at a different spot because, as in most organizations, these segments are in different stages and degrees of closeness to the ideal.

The really helpful part of segmented gap analysis is that it allows for the construction of simultaneous action planning and action plans that can be interdependent upon other action plans. So rather than approaching the organization linearly, the organization is viewed in full three dimensions and strategic planning can be built to attack all segments at once.

Is a segmented approach more difficult and time consuming? Absolutely but the results will dramatically improve the ability of an organization to plan effectively for the coming years.

Related Articles
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  How To Use A SWOT Analysis To Improve Your Business
  SWOT Analysis Tips
  To SWOT or not to SWOT?
  Don't SWAG Your SWOT!

Article Tags: analysis tools, analysis yields, core products, economic market, gap, gap analysis, high stakes, organizational analysis, segmentation, segmented approach, simplistic approach, straight line, strategic planning process, strengths weaknesses, suitable space, swot analysis, technology core, three dimensions, typical responses, worn tools



Related Forum Posts
Re: What makes a good business plan? - The SWOT analysis should be taken care of. I prefer using business plan software template myself and clients
Re: Is A Business Plan A Waste Of Time? - [quote="Kevin":dzvusovb]... However, after reading some of Martin Lindstrom's "Buyology: Truth and Lies About Why We Buy"... I'm beginning to think that all business plans and traditional market research (i.e. using focus groups, surveys, etc.) are a total waste of time. No joke, I'm serious. Lindstrom says "That's because, just like market research, economic modeling is based on the premise that people behave in a predictably rational way", but "Most of the brain is dominated by automatic processes, rather than deliberate thinking. A lot of what happens in the brain is emotional, not cognitive." ("Buyology" pg 28). Basically, consumers will tell you one thing, and do simply do another with their unconscious minds.[/quote:dzvusovb] Please explain more. I get your point, but STRONGLY disagree with your generalized statement that bplans and traditional market research are a total waste of time. Statements such as this without sufficient evidence are dangerous to potential young entrepreneurs who might trust your opinion. The business owner who does their own business plan will find that it is not a waste of time. Think about the probable benefits from completing just one component of market research in a business plan: A comparative analysis of your competition. A wealth of information critical to planning your survival will be gained from a well organized SWOT of your competitors and their products/services. (SWOT analysis is certainly not limited to plotting logical decisions. Emotion can be factored in the analysis.) You know as well as I do that it has been understood for a while now that most buying decisions are emotional and nearly devoid of logical decision making. Many sources say that focus groups are an inefficient use of resources. Your conclusion that [quote="Kevin":dzvusovb]I'm beginning to think that all business plans and traditional market research (i.e. using focus groups, surveys, etc.) are a total waste of time. No joke, I'm serious.[/quote:dzvusovb] because focus groups are found to be inefficient is wrong. Your logic is faulty. You must qualify your statement more.
Re: Is A Business Plan A Waste Of Time? - [quote="MississippiInventor":1gcdhgrl]Please explain more. I get your point, but STRONGLY disagree with your generalized statement that bplans and traditional market research are a total waste of time. Statements such as this without sufficient evidence are dangerous to potential young entrepreneurs who might trust your opinion. The business owner who does their own business plan will find that it is not a waste of time. Think about the probable benefits from completing just one component of market research in a business plan: A comparative analysis of your competition. A wealth of information critical to planning your survival will be gained from a well organized SWOT of your competitors and their products/services. (SWOT analysis is certainly not limited to plotting logical decisions. Emotion can be factored in the analysis.) You know as well as I do that it has been understood for a while now that most buying decisions are emotional and nearly devoid of logical decision making. Many sources say that focus groups are an inefficient use of resources. Your conclusion that [quote="Kevin":1gcdhgrl]I'm beginning to think that all business plans and traditional market research (i.e. using focus groups, surveys, etc.) are a total waste of time. No joke, I'm serious.[/quote:1gcdhgrl] because focus groups are found to be inefficient is wrong. Your logic is faulty. You must qualify your statement more.[/quote:1gcdhgrl] Hi MississippiInventor, All I'm saying is that if your data collected is unreliable, then what was the point of collecting it in the first place (i.e. creating a business plan)? But at the end of the day, it's just my opinion and I knew my post would draw out strong opposition. I'm a huge fan of branding expert, Martin Lindstrom's research and he's been hired by multi-billion/million dollar companies as a consultant, so his logic (and my decision to side with him) can't be too far fetched. In fact, Martin was able to raise millions from investors to conduct his brain study research on consumer behavior. You see, the key isn't to necessarily stop creating business plans... BUT to learn to "unlearn" and to look at how we can find the truth behind why people support (and favour) some products/services, instead of others. Things like focus groups, and customer surveys are ineffective and archaic tools (I already explained why in my previous post).


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