The nature of the external environment surrounding the company3 Markets3
Other external factors4
Corporate Strategy at a glance6
Business Strategy at a glance6
It was the year of 1969 when man has taken its first step toward the moon and “Doris and Don Fisher opened the first Gap store in US in San Francisco.” The fast change in style between teenagers and adult lead to formation of company name called “GAP”. From just a single store in 1969, it has expanded to approximately 3000 stores with over 150,000 employee world wide making $16.3 billion revenue in the year 2004. Because of good management strategy and high success Gap became second largest retail in U.S.A. It has expanded it hand to UK, Canada, France, Japan, Germany and now targeting Asian market. GAP usually sells casual clothes, shoes and accessories for man, women and children. These goods are offered under the following names: Gap, Banana Republic, Old Navy and Forth and Towne. Under gap brand they have Gap, Gap Kids, Baby Gap, Gap body & Gap Maternity.
“I created Gap with a simple idea:
to make it easier to find a pair of jeans. We remain committed to that basic principle.”
Gap Inc. Founder and Chairman
Source :www. GapInc.com
In the beginning Gap was sell only Levi’s products where they have to depend on that particular brand by and large. Later on when they realized depending too much on a particular product may harm the business in the future, they have changed there course of depending on a single particular product .Gradually they have came up with there own product name and different supplier in order to reduce risks. In 1983 Gap purchased Banana Republic that was already famous for travel and safari wear. Here they targeted upscale customer with more of customized product. Due to heavy price competition, in 1994 Gap has come with another brand name known as Old Navy in order to attract costumers of lower income. Here they mainly sell product with lower price. The Innovation of this brand gave Gap a huge success that it has reached $1 billion sales in a fewer than 4 years. Recently in the year 2005 they have come up with another new brand called “Forth & Town” which targeted women above the age of 35.This segment have focused mainly due to demographic change in over time where there can be seen growing number of more adult than teenagers. In order to give maximum costumer satisfaction and feasibility Gap Inc has launched website for most of its store. For further milestones, please refer Appendix A.
The nature of the external environment surrounding the company
The three major areas of external environment impact on Gap Inc. are: 1.More that 50 different countries it source its fabric and garments form 2.The several countries it operate its stores in
3.The logistics to get the material and garments from one place to the next.
Gap found a niche market in the casual apparel , jeans, khaki’s, T-Shirts and sportswear. With Banana Republic and Old Navy concentrating on other identified markets for more luxury clothing and family clothing specifically.
Local USA- Severe competition from specifically supermarket chains that also buy in bulk and is distributing through its branches as just one of many product ranges on offer, notably in this category is Wal-Mart and Sears. The garment brands in these stores had also became quite well known and is of similar quality than that of GAP Inc. there are also the specialty store competition. Major competitors are Abercrombie & Fitch, American Eagle Outfitters and J. Crew.
•Canada- Second oldest market with a large amount of stores and...