1.0 Company Strategy
Gap Inc. owns and operates five brands and over 3,200 stores in more than 40 countries worldwide. Of the four Porter’s Generic Competitive Strategies, Gap Inc. falls under the differentiation category because the San Francisco based company sells 5 different brands stretching itself to reach every market in the fashion industry differentiating itself from its mono-market serving competitors. Competitors like H&M (Gap), Macy’s (Piperlime), J.Crew (Banana Republic), Aeropostale (Old Navy), and Lululemon (Athleta) only sell specific styles of clothes to specific market segments.
Gap Inc.’s chosen strategy is appropriate in the fashion/retail industry because the more different or stylish the clothes, the more market share Gap Inc. will gain. The market is saturated with thousands of other clothing retailers competing for the same market share. All of Gap Inc.’s companies reach a wide variety of different markets: Gap targets the stylish urban fashion; Banana Republic serves the upper middle class with quality professional and casual wear; Old Navy attracts the cost conscious consumers with their low cost strategy store; Piperlime competes with big department stores such as Nordstrom and Dillard’s; and Athleta sweeps up women’s sports apparel.
Since the fashion industry is an enormous market with many different outlets and an unsteady economic environment, the need to differentiate a company from other corporations to stand out with a complete lineup is necessary to participate in the global competition. One of Gap Inc.’s many strengths is the copious amount of retail store locations for consumers to easily reach. If a consumer opens a Gap Inc. credit card, customers can use at any of the five stores and receive discounts by achieving points and always a percentage off your purchase. Another strength is the established brand with one of the world’s most commonly recognized logos. Without that brand presence, differentiation from other competitors would make it next to impossible.
2.0 Alliances & Mergers
Over the past couple of years, Gap Inc. has looked for many ways to capture a greater retail market share by forming a larger franchise. Gap has adopted Banana Republic, Old Navy, Piperlime, and Athleta brands in order to expand their businesses. In terms of alliances, the Gap has teamed up with several well-known names in order to establish their business and customer brand. GQ magazine has launched a new line that Gap Inc. has been involved with. The limited edition menswear design has been something that has helped increase the company’s revenue. Establishing the “Best New Menswear Designers in America” project has allowed recognized designers from Gap to take part in a mentoring program led by GQ. All four designers are also given the opportunity to create looks for a limited edition Gap collection.
Teaming up with nonprofit organizations has also been a focus for Gap. Over the years, Human Resources and Learning & Development employees of Gap Inc. have partnered with Compasspoint, a nonprofit consulting firm with expertise in capacity building. Gap Inc. employees have volunteered countless hours at the Youth Job Center. From providing technical expertise in strategy or operational planning to conduct workshops or job shadowing activities for our teens, the company has truly giving back to the community. Allowing younger generations to express their ideas, be innovative, and share their leaderships skills are just some of the ways that Gap Inc. is establishing a name for themselves. Partnering with Goodwill in the “Donate Movement” by working with customers to give back their clothing has been a huge effort. Not only is Gap working to give back but they are also looking to educate the public on the positive impact donations can have on both people and the planet. Lastly, Gap Inc.’s partnership with Girls Inc. has provided life-changing internships for women across the...
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