THE GAP-IN-THE-MARKET MODEL
One of the most effective ways to enter a new market is by tapping into an underserved niche. Identifying unmet customer needs gives businesses a significant edge, making thorough research essential. The Gap-in-the-Market Model is a valuable tool that helps businesses map out their competition within a simple three-dimensional framework, each axis defined by a key metric. This analysis provides clarity about where competitors stand, allowing companies to make informed decisions and take strategic action.
There are three key characteristics of market gaps:
Original: The idea is entirely new.
Improved: A concept has been borrowed and enhanced.
Underexplored: The idea exists but hasn't yet reached a new market.
Netflix offers a prime example of this model. Think back to the frustrating experience of driving to Blockbuster, only to discover that all the latest DVD rentals were gone. That gap in the market for convenient, on-demand entertainment is what propelled Netflix from a small startup to an industry giant. As technology and consumer preferences evolve, new gaps continually emerge. Uber identified a gap in the transportation industry and revolutionized ride-sharing. Sometimes, gaps arise unexpectedly—like Zoom, which was unprepared for the sudden global shutdown during the pandemic. In the wake of the crisis, businesses from mask manufacturers to home gym equipment makers saw skyrocketing demand.
The key takeaway from the Gap-in-the-Market Model is that it requires creative thinking. It’s about embracing a “yes, and…” mentality—an approach often seen in children, before they’re constrained by the more rigid thinking patterns of adulthood. Creativity is not just about solving problems in new ways; it's about executing tasks differently and thinking outside the box. Does your business have the creativity to leverage an open gap in your market?
