Gap Inc

Table Of the Contents

Introduction 2

Development 2

The nature of the external environment surrounding the company 3

Markets 3

International 3

Suppliers 3

Distribution Channels 4

Other external factors 4

SWOT Analysis 5

Strengths 5

Weaknesses 5

Opportunities 5

Threats 5

Corporate Strategy at a glance 6

Business Strategy at a glance 6

GAP structure 7

Recommendations 8

Appendix A 9

Milestones 9

References 11

Introduction

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.”

Don Fisher,

Gap Inc. Founder and Chairman

Source :www. GapInc.com

Development

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.

Markets

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.

International

• Canada- Second oldest market with a large amount of stores and the only other country where all the brands are represented. With the close cultural and economic links through NAFTA and similar tastes in clothing, it really forms one huge market in North America.

• Australia- Potential market being investigated. Tastes are very similar.

• Japan- To a certain extend this is an odd fit with Japanese traditional clothing so far removed from the US look. Since World War 2 there has been a serious move by Japanese to embrace a lot of things from the US as a sense of progress, following the trends of the richest nation on earth.

• France- Traditionally the French does not like things American, but with skillful marketing and a clear niche in the market for casual clotting, GAP had made good progress in that market.

• Germany- Was not very successful and sold in 2004 to Swedish retailer H&M

Suppliers

Gap source its merchandise from over 700 companies in more than 50 countries. Some 40% of the product is manufactured in the USA and the remaining 60% internationally, mainly Latin America, SE Asia,