Gap Case Analysis

Topics: Retailing, TJX Companies, Marketing Pages: 11 (4640 words) Published: April 25, 2013
MKT 460
Gap Inc. Marketing Plan

Problem Component
Business Description
As this implicit case indicated, Gap Inc, a idolize apparel band that represents affordable style for everyone, was founded basing on San Francisco blue jeans retailer in 1969 by its two founders—Doris and Don Fisher. It then expanded its product lines during the 1970s and the company became a public corporation in 1976 and began its expansion through combination of acquisitions, new ventures and growth strategies. Nowadays, Gap Inc. has become a giant in the family clothing retailing industry covering apparel-relevant products for men, women and children. After 43 years of running, the company currently owns 3,248 branch stores worldwide and hires more than 13,200 employees. For now the company’s market cap is 15.32 billion and 15% of the US total industry market shares. Under Gap, there are 5 different brand divisions: Gap (Gap, GapKids,babyGap), Old Navy, Banana Republic, Athleta as well as Piperlime, which provide a broad and deep product lines such as clothing, footwear, accessories and personal cares. The current level of sales is $14.197 billion and earns a net profit of $1.102 billion. Gap Inc.’s mission statement is to create emotional connections with customers around the world through inspiring product design, unique store experiences, and compelling marketing. In addition the company provides a purpose statement to guide the daily behaviors of its employees: "Our purpose? Simply, to make it easier for you to express your personal style throughout your life.”We have more than 150,000 passionate, talented people around the world who help bring this purpose to life for our customers." The firm is generally pursuing a broad differentiation strategy, provides varies products for different level of people in the society. The stylish and fashionable apparel that the company provides at a moderated price is the core competency of the company. And its great market penetration through improved online shopping experience, iconic advertisement promotion and most importantly, market development towards Middle-east and Asia which expose the company to high brand awareness, gained Gap the competitive advantage ahead its competitors. Overall all it is a perfect business model for Gap Inc. to maintain a long-term profitability. The CEO of the firm is Glen Murphy, who came into position by 2007. Following the founder, Don Fisher’s vision, “Make it simple to find a pair of jeans”, Murphy improved the company’s apparel product lines, initiated franchising Gap and its division Banana Republic stores specially in Middle East and Asia, and acquired the women’s active wear company Athleta by 2008. Also, under Murphy, the company’s website was reconfigured and became more integrated by allowing online shoppers to shop for all its divisions using only one single shopping cart. This CEO’s perspective is to expand the company globally to bid better sales and brand recognition from the developing countries of which with greater purchasing power. Gap Inc. itself is currently experiencing stressing decline in revenues and sales which began in 2005, therefore the primary goal for the company is to stop this depressive tend and boost them up through different courses of actions. Under Murphy, the company has placed increasing effort on extending its franchising businesses globally to Middle East and Asia and improve its online businesses by providing user-friendly web interfaces. Moreover, he also appointed the famous designer Patrick Robinson to be the chief designer to reposition of its target market from young aged (18-24) to young professionals (25-35) as well as the redesigned product lines. All these changes seemed to have brought the company in the desired direction with a stronger leader, clear focus and additional cost-cutting initiatives. However, the actual indication denied this assumption. The performance on sales continued to decline...
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