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Advising on International Expansion of Gap Inc.

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Advising on International Expansion of Gap Inc.
Assignment for International Business Environment

Group Project: Advising a multinational company on its international business development.
Chosen Company: Gap Inc.

Module Name
International Business Environment I

Word count: 4379

Submission Date: 09/11/2009
Contents
Abbreviationsv
Introduction1
1. Impacts of Globalisation on Clothing Industry1 2. Environmental Analysis of GAP’s Expansion: China vs. Brazil3
Market Environment3
Market Size & Market Potential3
Clothing Industry Facts5
Economic Environment6
Apparel-shopping Attitudes and Behaviors7
Political Environment7
Political Risks7
Corruption8
Regulatory Environment8
Red Tape8
Taxation9
Protecting Investors9
Factors in Value Chain9
Labour Market9
Raw Material Production and Manufacturing Capacity10
Distribution11
Choice and Reasons11
SWOT analysis for GAP entering China13
Opportunities13
Threats14
Strengths and Weaknesses16
Recommendations16
Location and Distribution16
Product and Promotion16
Clothing Production and Company Management 17
Conclusion17
Appendix 19 Reference21

Abbreviations BRIC | Brazil, Russia, India and China | CISGCNCICCPC | China Industry Security GuideChina National Chemical Information CenterCommunist Party of China | CPI | Corruption Perception Index | CSRs EUFDI GAP | Corporate Social Responsibilities European UnionForeign Direct Investment GAP Inc. | GCR | Global Competitive Report | GDPIPCIPL | Gross Domestic ProductIncome per CapitaIntellectual Property Law | IBGE | Brazilian Institute of Geography and Statistics | IPRs | Intellectual Property Rights | NLCL | New Labor Contract Law | SWOTVAT | Strengths, Weaknesses, Opportunities and ThreatsValue Added Tax | WFOEs | Wholly Foreign-Owned Enterprises | WIPO | World Intellectual Property Organization | WTO | World Trade Organization |

Introduction
Gap Inc., with five international brands, is now one of the world’s largest specialty



References: A.T. Kearney. (2008). Brazil is Most Attractive Emerging Market for Apparel Retailers Looking to Invest Abroad [online]. Available at: <http://www.atkearney.com> [2 November 2009] Beijing Local Taxation Bureau Brazilian Institute of Geography and Statistics. (2008). Population Estimates of Brazil [online]. Available at: <http://www.ibge.gov.br/english/disseminacao/online/popclock/popclock.php> [23 October 2009] Britain, G Cai, W. and Klyushina, U. (2009). Talent retention and development within multinational company in China [online]. Available at: <http://www.essays.se/essay/a0232b0619/> [20 October 2009] Ce´line Abecassis-Moedas Ce´line Abecassis-Moedas. (2007). Globalization and regionalization in the clothing industry: survival strategies for UK firms [online]. Available at: <http://www.fcee.lisboa.ucp.pt/docentes/url/ceabec/ijopm.pdf> [6 November 2009] Chan, W Dang, X.B. (2008). Foreign Direct Investment in China [online]. Available at: <http://krex.k-state.edu/dspace/bitstream/2097/1116/1/XiaobaoDang2008.pdf> [26 October 2009] Dickson, M Doshi. (2006). Chinese Retail Sector Got The Rhythm Back [online]. Available at: < http://ezinearticles.com> [20 October 2009] Dyer, G Economic Observer. (2009). China VAT reform, the second step: elimination of double taxation (original material written in Chinese) [online]. Available at: < http://www.sxeport.gov.cn/0/1/62/1153.htm> [12 October 2009] Ek, A EmergingTextiles. (2008) Apparel Manufacturing Labor Costs in 2008 [online]. Available at: <http://www.emergingtextiles.com/?q=art&s=080523-apparel-labor-cost&r=free 2008> [27 October 2009] Eng, J Global Textiles. (2009).Global Textiles Crisis impact Brazil’s apparel industry. (original material written in Chinese) [online]. Available at: <http://cn.globaltexnet.com/news/detail/1/2/d129558.html>[28 October 2009] Global Times Hill, C.W.L. (2009). International Business: competing in the global marketplace, 7th edition. McGraw-Hill: New York. IANS Kalish, I. (2006) China 's Consumer Market: Opportunities and Risks. Deloitte Research [online]. Available at: <http://www.deloitte.com/view/en_US/us/article/c6205264b03fb110VgnVCM100000ba42f00aRCRD.htm> [14 October 2009] Knowledge Lane, C. (2008). Fashioning the Value Chain [online]. Available at:<http://www.research-horizons.cam.ac.uk/preview/fashioning-the-value-chain.aspx> [30 October 2009] La Poste McKinnon, R., Lee, B., and Wang, Y. D. (2009). The Global Credit Crisis and China’s Exchange Rate [online]. Available at: <http://www.apeaweb.org> [30 October 2009] National Bureau of Corruption Prevention of China Organization For Economic Co-operation And Development. (2009). OECD Economic Surveys Brazil [online]. Available at: <http:www.oecd.org> [17 October 2009] Paschoalin, T.M, (2007) Press Release. (2000). Brazil: November 2000 [online]. Available at: <http://www.wto.org> [2 November 2009] Reportlinker Strasburg, (2004).. Gap finds problems at thousands of its overseas factories [online]. Available at:<http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/05/13/MNG6E6KL7E1.DTL#ixzz0WKLSglRx> [28 October 2009] The Boston Consulting Group The state council of China. (2009). Direction plan for textile industry in China (2009-2011) [online]. Available at: <http://ctie.webtextiles.com/info/2009-8-21@378935.htm> [26 October 2009] Transparency Internation World Bank. (2006). Doing Business in Brazil [online]. Available at: <http://www.doingbusiness.org/documents/doing_business_in_brazil_07.pdf> [20 October 2009] World Bank (2008) World Bank. (2009). Doing Business 2010 Brazil [online]. Available at: <http://www.doingbusiness.org/Documents/CountryProfiles/BRA.pdf> [20 October 2009] World Economic Forum Ye, L. and W, J. (2009). Factors of branding - A Case of Hennes & Mauritz AB in China [online]. Available at: <http://www.essays.se/essay/ef9eac8c31/> [12 October 2009] Zhang, L Zhao, S. (2008). Analysis of Chinese Clothing Consumption in 2007 and 2008 [online]. Available at:<http://www.buzzle.com/articles/analysis-of-chinese-clothing-consumption-in-market-in-2007-and-2008.html> [27 February 2008] Zhao, L

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