Strategic Recommendations for GAP Inc.,
The Gap was founded in 1969 by husband and wife Don and Dorris Fisher. It started in down town San Francisco as a Levis retailer who also sold records. From the beginning, the Fishers wanted the company to have a unique image. They wanted shopping for jeans to be a fun and easy experience as opposed to the difficult and unexciting experience that was present in the 1969 jeans industry. The Fisher’s opened their first store with $63,000. It made 2 million dollars in the first year. In 1970, the Fisher’s incorporated opened a second store and a corporate headquarters and Gap Inc. was born. By 1973, Gap Inc. operated 25 stores including some in the east coast market. The next year, Gap Inc. began selling private label clothing and The Gap store known today came to life. Gap Inc. grew rapidly through the 80’s and hit a huge peak of success in the 90’s. Led by CEO Millard Drexler, Gap Inc. helped redefine affordable fashion and was responsible for a series of impactful and innovative ad campaigns that included celebrity appeal and an all- American vibe. Gap Inc. acquired Banana Republic in 1983, which was once a safari-themed boutique and is now a multi-million dollar retailer focused on business and business casual attire. In the 90’s, Gap Inc. launched its largest domestically contributing brand, Old Navy, which contributes over a billion dollars in sales every year. Old Navy is a discounted clothing retailer that sells denim and cotton basics at affordable prices. Drexler left the company in 2002 and is now the CEO of J. Crew. For the past 10 years, Gap Inc. has restructured its vision and has expanded into over 20 countries. The expansion has been met with difficulties and the domestic brand is not thriving as it was in its glory days. The success of the 80’s and 90’s may not be enough to carry Gap into the new age. It is important to take a step back and analyze the industry as a whole as well as Gap Inc.’s present strengths and weaknesses before strategizing for the future. Approach to analyze the Firm’s strategic position:
To determine GAP’s current strategic position, an Internal Analysis and External Analysis is performed. Through this process I have understood the Strengths, Weaknesses, Opportunities and Threats for GAP by its external, internal and competitor environments. SWOT Analysis:
Strength, Weakness, Opportunity, Threat (SWOT). A SWOT analysis guides a firm to identify the positives and negatives inside their organization (S-W) and outside of it, in the external environment (O-T). Developing a full awareness of your situation can help with both strategic planning and decision-making. Internal Analysis:
To begin the strategic management process, we are required to conduct an internal analysis. This involves identifying the business' strengths and weaknesses, by analyzing its competencies. Strengths:
Based on the case and external research, below are the concluded strengths of GAP. Global brand recognition: GAP is globally recognized as american style, pop culture and the emotional affinity. Stores located in worldwide GAP has 3,095 stores in worldwide as of January 30, 2010. Company-owned stores are located in United States, United Kingdom, Japan, Canada, France and Ireland. Franchisees-owned stores are located in other countries such as Turkey, United Arab Emirates ans so on. Franchising system easily to expand Gap store internationally. GAP has franchise agreements with unaffiliated franchisees to operate Gap or Banana Republic brand stores worldwide. Multiple brands and brand extensions for a wide range of segments GAP has 5 distinct brands such as Gap, Old Navy, Banana Republic, Piperlime and Athleta and brand extensions such as GapKids, babyGap, gapbody and GapMaternity. GAP is very well known in the industry for its creative advertising and marketing strategies. Weaknesses:
Based on the case and...