Table of Contents
Background of the company:6
Mission and vision statement:6
Porter’s Five Forces analysis:8
Treat of new entry:8
Threat of substitutes:9
Power of suppliers:9
Power of buyers:9
Social - Cultural:10
Economics strategy adopted by Gap inc. to improve it’s profits:13 Marketing strategy:13
Economic performance of Gap inc. in the past 3 years:15
Income Statement (In USD)18
This paper is an analytical and critical examination of The Gap Inc. in its first part; it will introduce the company from its creation to its current position. The description will include the major firms that are part of The Gap Inc. These firms are Gap, Piperlime, Old Nany and Banana Republic. After describing the background of the company, stating the objectives, and introducing the different products and brands, the paper will conduct an industry analysis, analyze the market structure using Porter’s five forces, PEST and SWOT analysis, and also analyze the marketing strategy. In the last part of the paper, the financial data analysis from consolidated financial statement will help to examine the performance of the company. Thus indicating whether objectives were achieved or not. The paper will also keep an overview of Gap Inc’s social responsibility, environmental, ethical and managerial consideration in its everyday operations. As conclusion, the paper will compare the company’s performance to the industry average and also analyses stock trend to assess its progress.
The Gap, Inc. is the worldwide specialty retailer offering apparel, personal care items, and accessories under five major brands: Gap, Banana Republic, Piperlime, And Athleta. The company was incorporated in California in July 1969 and was reincorporated under the laws of the State of Delaware in May 1988. Almost all products sold under The Gap Inc’s brands are internally designed and manufactured outside. But it sells also some products that are designed and produced by others companies. The company operates its own stores in the Unites States, Canada, The United Kingdom, France, Ireland, Japan, China, and Italy. To the rest of the world, Gap Inc. has franchise agreements with unaffiliated franchisees to operate stores. The apparel and related products are sold under Gap inc. brand name. The company uses three distribution channels: Full price retail stores, online stores, and outlet. As per 29th January 2011, Gap operates in 3246 stores around the world and employs about 165,000 people. The table below shows the spread out of Gap’s stores around the world.
The company is traded in New York Stock Exchange under the name GPS. As per June 6, 2011, it has capitalized a market value of $10.4 billion and sustains large number of brands. These brand’s companies were bought by gap inc. at different times though out its history. Background of the company:
Gap inc. started as a general jeans retailer when in 1969, Donald Fisher and his wife wanted to buy Levi’s Jeans, but they could not find any suitable for them. They realize that there is a shortage in the supply of jeans. Therefore, they decided to open their own shop. The couple chooses a strategic location which is nearby the San Francisco University to set up the store. That store sold only Levi’s jeans in the beginning. But the positive and quick response from young people motivates the couple to open more outlets. No more than 5 years after opening the first shop, the company sales revenue grew from $2.5 million in 1971 to $97million in 1976 operating in 21 states of America with 186 stores. By that time, as the recession started in early 70’s, Gap had...