Gap Outsourcing in China: PESTLE Analysis
Introduction
The Gap, Inc. Company is a San Francisco, California based retail clothing and accessories company. It was founded by Donald G. Fisher and his wife Doris. Over the years, it has evolved into a major retail company specializing in casual style and urban chic clothing for all sexes and ages all over United States, Canada, Japan, Germany, and the United Kingdom. Outsourcing as a force in business continues to remain the main point of discussion in most boardrooms in most corporations. Companies want to utilize modern infrastructure and focus on their core strengths while other professional firms handle their other business processes (Eltschinger, 2007: 2).The textile industry has been a fundamental driving force in China’s economy for many years. Outsourcing production to the Chinese manufacturers has become popular among other foreign firms in the recent past (Earnshaw, 2006: 362). This is especially because the textile industry is a labour intensive industry and firms prefer to outsource in China since it has large pool of cheap labour. The World Bank report of 2006 indicated some of the most suitable locations to invest in china which are; the south east Coastal provinces, the Pearl river delta province of Guangdong, all special economic zones and the province of Fujian (Yuang, 2008: 20).
Pestle analysis is a technique used to assist corporations in understanding the external environment in which they operate in the present and future. It helps an organization to assess the macroeconomic conditions surrounding it in order to make a business decision. It works more efficiently when used in conjunction with risk analysis, SWOT analysis, and urgency grid. Expert knowledge of the organization and its external surrounding is also important in pestle analysis. The word PESTLE was coined from political, Economic, Sociological, Technological, legal, and environment factors that affect an organization. The main aim of conducting PESTLE analysis is to help in
The Gap, Inc. Company is a San Francisco, California based retail clothing and accessories company. It was founded by Donald G. Fisher and his wife Doris. Over the years, it has evolved into a major retail company specializing in casual style and urban chic clothing for all sexes and ages all over United States, Canada, Japan, Germany, and the United Kingdom. Outsourcing as a force in business continues to remain the main point of discussion in most boardrooms in most corporations. Companies want to utilize modern infrastructure and focus on their core strengths while other professional firms handle their other business processes (Eltschinger, 2007: 2).The textile industry has been a fundamental driving force in China’s economy for many years. Outsourcing production to the Chinese manufacturers has become popular among other foreign firms in the recent past (Earnshaw, 2006: 362). This is especially because the textile industry is a labour intensive industry and firms prefer to outsource in China since it has large pool of cheap labour. The World Bank report of 2006 indicated some of the most suitable locations to invest in china which are; the south east Coastal provinces, the Pearl river delta province of Guangdong, all special economic zones and the province of Fujian (Yuang, 2008: 20).
Pestle analysis is a technique used to assist corporations in understanding the external environment in which they operate in the present and future. It helps an organization to assess the macroeconomic conditions surrounding it in order to make a business decision. It works more efficiently when used in conjunction with risk analysis, SWOT analysis, and urgency grid. Expert knowledge of the organization and its external surrounding is also important in pestle analysis. The word PESTLE was coined from political, Economic, Sociological, Technological, legal, and environment factors that affect an organization. The main aim of conducting PESTLE analysis is to help in