Gap Inc

I. SUMMARY MEMORANDUM To: Mr. Jinn Chow Yin, president of Yin Enterprises From: Chivonne Parker and Vonique Booze, Gap Inc. representatives Date: January 16, 2001 Regarding: Proposal for an international business venture The business venture that we propose is to set up a chain of our stores, the Gap Inc. We are a global company with three exciting divisions- Banana Republic, The Gap, and Old Navy. Our performance begins and ends with our customers. We never forget that. Everyday we try to listen more to what customers are telling us, and work harder to exceed their expectations. Our ability to continually change and evolve our brands is what drives our long-term success, and our passion for innovation is what keeps Gap, Banana Republic, and Old Navy exciting. From product design and distribution, to marketing, merchandising, and shopping environments, we control our brands and what our customers touch, see and feel. We believe that's a competitive advantage as the retail world today moves at Internet speed. We feel that the Japanese can help us to expand our company. We would like to work with you and your country to help us get our products into the hands of Japanese consumers. Th! is would be a great accomplishment for our corporation and we'd like you to be apart of it. We're very excited about this proposal. I hope we can work together and help us to accomplish our goals. II. INTRODUCTION The international project we are doing will be to propose setting up a chain of apparel and accessories stores in Tokyo, Japan. The company we will be representing is Gap Inc. Gap Inc is a global company with three different divisions-The Gap, Banana Republic, and Old Navy. Our major products include an array of clothing from jeans and khakis to Pocket-Ts and Pro-Fleece wear. Gap Inc. also offers a variety of accessories which include our own scent lines for men and women, handbags, totes, socks, belts and other extras. Tokyo is the largest urban area and capital of Japan, and one of the most heavily populated metropolises in the world. Tokyo is located at the head of Tokyo Bay, midway along the eastern coast Honshu, the largest of the four main islands of the Japanese archipelago. The city occupies most of the southern part of the Kanto Plain, the largest area of flat land in Japan. Tokyo has been the capital of Japan since 1868, after the Tokugawa dynasty (1603-1867),! which ruled from Kyoto, was overthrown. At that time the city's name was changed from Edo to Tokyo, which means "eastern capital." Today Tokyo is Japan's financial, industrial, commercial, educational, and cultural center; it is also the country's principal contact point for trade and diplomatic relations with the rest of the world. We selected Japan because of its love for the western culture. Since the Japanese economy is similar to our own, we came to the conclusion that it would be the perfect place to establish and expand our business in the global market and make an immense profit. Japan has an exceptional economic system, which will prove to come to and advantage for our business. We feel our corporation can provide for and relate to the Japanese consumer. Some of the trade barriers are testing standards, certification requirements for products, and customs procedures. We will go into a more detailed description of these barriers in the proposal. Some of the s! ources of information in this proposal are www.jinjapan.org, which provided a lot of information regarding Tokyo's consumer behavior and data, statistical information on the Japanese population density, etc. As stated above, this information will be in more detail throughout the proposal. III. ANAYSIS OF THE INTERNATIONAL BUSINESS SITUATION A. Economic, political, and legal analysis 1. Since the end of World War II, Japan has become a major economic power. The country has the world's second largest economy in terms of gross domestic product (GDP). The GDP is the total value of all goods and services produced within a country yearly. Only the United States has a greater GDP than Japan has. Japans economic system is strong and rapidly growing, even though they don't have a lot of natural resources. They have to import most of their raw materials needed by its manufacturing industries. In order to get money to buy these imported materials, Japan sells the products of its factories to many other countries throughout the world. So in this, their economy extremely depends on foreign trade. Manufacturing Manufacturing is the single most important economic activity in Japan. It employs 24% of all its workers and accounts for 28% of Japans gross national product (GPA). The industrial growth of Japan ranks amongst one of the highest in the world. Manufactured products such as electronic devices and huge oil tankers are popular for their exceptional performance and high quality. The factories in Japan are very high tech which gives a great advantage to the Japanese economy. This is because it makes production more efficient and even more importantly less expensive. Production of transportation is the most important equipment to the Japanese industry. They produce 8 million cars each year, making it the worlds leading automobile-manufacturing country. Japan is the worlds leading shipbuilder. Japan is a thriving chemical industry. Japan are also leading producers of iron and steel, much of which is exported, cement, ceramics, clothing, fabricated metal products, food pro! ducts, lumber and wood products, paper products, raw silk, and textiles. Agriculture Agriculture in Japan accounts for 3% of the GPA and employs 9% of the nations` workers. Only about 15% of the land in Japan is cultivated. The most important crop in Japan is rice. Japan is one of he worlds leading rice-producing countries. Rice fields take up about 50% of the country's farmland. They also have grown a wide variety of other crops including sugar beets, tea, and tobacco. Fishing Industry Japan is ranked number one in the worlds fishing industry. It employs only 1% of the nations` workers, but they catch 13 million short tons of fish every year. Japan is also a world leader in tuna fishing and ranks second to the United States in the amount of salmon caught. Other products of Japans fishing industry include eels, flatfish, mackerel, Pollock, sardines, craps, squid, and many other types of seafood. Mining Japan has a wide variety of minerals, but most are in quantities to small to satisfy the countries needs. The mining products include coal, silver, manganese, tin, zinc, copper, lead, limestone, and coal. The materials that are needed by Japans industries have to be imported. All the bauxite, copper and petroleum the country needs, is mostly bought from other countries. Service Industries Service Industries is a general name for a large, varied category of economic activities. All together, these industries account for 61% of Japans