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Hi
Please could you give me the definition and explanation of planning gap. As I went through many definitions, it seemed to be a bit confusing.
Also I would like to understand the different strategies that can be used to close this planning gap apart from Ansoff’s Matrix.Thank You so much.
Imagine a company which submits its profit forecast to head office, predicting profits of $2m. Head office immediately replies saying that’s not good enough and that they expect/want $3m. There’s a planning gap of $1m. To fill this gap the company can look at the quadrants of the Ansoff matrix:
1 Gain market share with existing markets and products/cost save/withdraw from unprofitable activities
2 Market development – eg start to export
3 Product development – eg a new product line
4 Diversification – related or unrelated.There’s nothing else to do to increase profits.
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