The gap exists because as businesses evolve, so do their structure, the type of challenges they solve, the market they can serve and the capabilities they offer; creating a gap between what the business has been and what it's evolving into.
The gap exists when strategy, market positioning, value proposition and execution aren't working together to fully communicate and deliver the evolving business's strategic worth.
The gap can be caused by a range of issues such as:
- An unclear market position
- Weak or fragmented value propositions
- Multiple brands pulling in different directions
- Poor differentiation
- Products and services that don't ladder up to a coherent strategic story
- A mismatch between what the business has become and how the market perceives it
- Failure to articulate future growth opportunities
Putting it another way and more simply, the gap is caused by a difference between what the strategic reality is in terms of what the business actually is today and what it's able to achieve versus the market's understanding and belief of what the business currently is and is capable of.
How these materialise could be:
- Investors just don't get what you do up against other investment opportunities
- Comparisons are made to businesses that you don't see as relevant
- You can't with clarity explain what your business does, where once you could
- Different people in your business explain what the business does differently
- Brands and selling teams work in silo versus cross-selling and up-selling
- People are confused over what the business's portfolio and capabilities are
- The average deal doesn't consist of what the business wants to be selling going forward
Closing the gap means aligning:
- Business Strategy – where the company is going
- Market Positioning – the space it wants to own
- Value Proposition – why stakeholders should choose it
- Brand Architecture – ensuring every brand strengthens the whole
- Customer Experience – consistently delivering the promise
- Commercial Narrative – enabling customers, investors and acquirers to recognise the company's full value
Why is our thinking on the strategic value gap fresh and different?
The McKinsey Growth Imperative and its strategic gap focuses on if you should enter new markets; but not on how to empower your organisation to do it.
The Bain&Co Strategic Gap Analysis states having a clear market position increases investor and acquirer interest; but not how to create and position it.
There is a long list of trusted sources focusing on there being a strategic gap but The Craft are experts proven to help leaders to understand the gap in a business and support clients through the changes rapidly in a way that is easily adopted.
Over 90% of clients working with The Craft have experienced significant levels of growth in the following 12-24 month period and beyond. And over 40% of clients have been acquired within a 5 year period achieving high valuation realisation.