Gap inc swot analysis 2016

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Running head: GAP INC; AN ENVIRONMENTAL ANALYSIS Gap Inc; an Environmental Analysis Student’s Name Course Name Instructor’s Name Institution Affiliation Abstract Environmental analysis conducted by a company is usually about finding out the strong suites and the weaknesses of the corporation. Many corporate managers need such analyzes so as to gauge the capability of their companies; to know where they are placed on the corporate ladder. The external environment refers to key factors and influences outside the firm that have the ability to

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have extensively an effect on the performance of a firm. On the other hand, the internal environment refers to every aspect within an organizational structure that directly affects the corporate success of the said organization. In the fashion industry, competition is very stiff, and some brands do a lot just for their products not to get off the shelf. For clothing store chain like GAP to have survived such competition over the years, conduction of environmental analyzes must be a necessary part of the company’s protocol; perhaps on a quarterly basis. Introduction and Company Background Gap Inc. is a world renowned clothing line that is headquartered in California (San Francisco) and operates six of the most famous clothes brands globally. They include Gap, Old Navy, Banana Republic, Piperlime, Athleta, and Intermix. Gap Inc is venerated for the sales it makes on casual wear, accessories and a myriad other products for men, women and children; the products of the company include jeans, underwear, khaki, and tee shirts among others. The fashion giant has been in operation for the last forty­ six years, and it has done a lot of good for itself considering the fact that it started from a single store and now makes millions. The founders of Gap Inc are Doris and Don Fisher; they opened the first store of the company in the year 1969 (Bruce, Moore, & Birtwistle, 2004). All this they did with a simple idea of making it much easier for everyone to be able to find a decent pair of denim and for them to be committed to doing more in the name of fashion. In the New York Stock Exchange, Gap Inc is traded under the abbreviation GPS. Today, the Corporation takes pride in its 150,000 staff members and approximately 3200 departmental stores on a global basis. In addition to that, the Corporation has a market value of about 13.32 billion USD. All through the course of history, Gap Inc. has made a name for itself as a trail blazer in the fashion industry. This paper is going to give insights on how Gap Inc External Environmental Analysis The main factor that companies look out for in the external environment is competitors. Competitors pose the greatest threat on the growth and sustainability of a company. The top management of Gap Inc sees to it that analysis of the fashion industry and a competitive analysis of top rivals are also within their reach. An Industry Analysis The United States’ apparel industry is the biggest on the planet, made up of approximately 28% of the world total sum and happens to take pride in a market value of about $ 331 billion. The accurate size of the United States fashion and clothing industry is 225 billion USD. The table below documents more statistics on the apparel industry; Table Showing an Overview of the United States Apparel Market Description Market Value Volume of U.S. fashion industry 225 billion USD The sales of women’s clothes in the U.S. 110,826 million USD Average price per article of clothing in the United States 19 USD Total clothe departmental stores’ sales in the United States 183.01 billion USD Cost of clothing product consignments/shipments in the United States 12.86 billion USD Labor /total number of people employed in the US Industry 95, 176 billion USD Per Capita expenses on clothing in the United States 686 billion USD A Competitive Analysis Gap Inc does not mention in its Form 10­K which

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companies it deems to be its topmost competitors; the answer to such a query can be given by amidst much subjectivity. On the company’s Definitive Proxy Statement, there is mention of clothing companies that Gap’s company managers feel are analogous to their own (devoid of coming clean and calling such companies competition). Some them include TJX Companies (TJ Max and Marshalls) and Abercrombie and Fitch, which are regarded as the immediate competitors. Other companies include Aeropostale, American Eagle Outfitters, Levi Strauss and Limited Brands among others. Market Environment Despite the fact that the competitors pose a threat to the company, a SWOT analysis is capable of identifying the strengths and weaknesses of a company. Good management in a company involves optimizing on the strengths and working to minimize the weaknesses. SWOT Analysis The strengths of Gap Inc include worldwide recognition of the GAPTM brand; robust financial position; franchising opportunities and a consolidated multi­brand portfolio (Bruce, Moore, & Birtwistle, 2004). On the other hand, the weaknesses of Gap Incorporation include diminishing returns on assets and equity, the underutilization of assets and the company’s dependence on outside vendors for its goods. About the fashion industry, the opportunities that Gap Inc is predisposed to include opportunities for growth of the company’s Gap Kid’s brand, Opportunity to realize a reasonable proportion of the Asian market share, the increase in online commerce trends and the vast market share for women’s clothes. External Factor Evaluation for Gap Inc EFE or External Factor Evaluation is all about making an analysis of the external position of Gap Inc or its strategic intent. Trends in the Apparel Industry and Gap INC Gap Incorporation’s stable footing in the United States’ clothing industry, and its strengths against the over­sensitive retail setting emanate from its vast portfolio of a clothing line, and that assists it in caring for a greater number of end users. The dealer operates a triad of brands; Old Navy for fashion and cost­ conscious teenagers, the Banana Republic for the rich and older consumers, and Gap for the young adults. Moreover, Gap Inc has always been keen on keeping its clothes in line with alternating needs and times, plus efficient management of inventories. Key Areas of Uncertainty All is well for Gap Inc as a manufacturer on retail sales. One thing though that the company is not sure about is the effect negative criticism of its brand. Lately, some misguided critics have been heard saying that GAP stands for Gay and Proud. Hopefully, the company will ignore ramblings of bitter competitors and move on steady. Internal Environmental Analysis of Gap Inc The internal environment refers to every aspect within an organizational structure that directly affects the corporate success of the said organization. Internal environments are characterized by policies that help determine the work processes of employees. Gap Company Mission, Vision, and Objective Gap, Inc is a brand­builder. We create emotional connections with customers around the world through inspiring product design, unique store experiences, and compelling marketing.” It is also worth mentioning that the vision of Gap Inc is to realize effective Web initiative that could let the company strengthen its brand,

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enhance consumer relationships, attend to market shares that could not support a departmental store and cut costs. The company also believed that visiting online sites would attract new consumers and steal market share from competitors. Corporate, Business Unit, and Functional Level Strategies The stakeholders of the company usually convene on an annual basis to keep them up to tabs on the company’s progress. In addition to that, all accrued amounts entitled to them are also accorded respectively (Bennett, 2013). With such good communication, the company is always bound to relate well with stakeholders; shareholders inclusive. Whenever Gap Inc’s top level management make a decision regarding the growth and sustainability of the company all agreements are arrived at unanimously. This law applies to all departments within Gap Inc’s stores Strategies for Company Improvement Strong multi­brand portfolio and a strong financial position are among the key strengths of Gap Inc. Focusing on the production of female brands and targeting new markets within and without the United States e.g. East Asia would be a good strategy of making the company a household name on a global basis. To improve on its key weaknesses, Gap Inc could stop depending on outside vendors for its goods and open as much subsidiary outlets as possible. Conclusion With proper management of the company’s resources, Gap Inc. has the potential of moving from a single corporate strength to the next. Success factors that the company should put into consideration include competition and gaining new markets. New markets come with better profits and bottom lines. References Bennett, A. (2013). Most Fashion Consumers ‘Would Pay More’ For Ethical Clothing Production. Huffington Post. Retrieved from http://www.huffingtonpost.co.uk//2013/09/12/london­fashion­ week­ethic_n_3914479.html Bruce, M., Moore, C., & Birtwistle, G. (2004). International retail marketing (pp.142­ 144). Oxford: Elsevier Butterworth­Heinemann. 1 GAP INC; AN ENVIRONMENTAL ANALYSIS 2 GAP INC; AN ENVIRONMENTAL ANALYSIS 3 GAP INC; AN ENVIRONMENTAL ANALYSIS 4 GAP INC; AN ENVIRONMENTAL ANALYSIS 5 GAP INC; AN ENVIRONMENTAL ANALYSIS 6 GAP INC; AN ENVIRONMENTAL ANALYSIS 7GAP INC; AN ENVIRONMENTAL ANALYSIS 8 GAP INC; AN ENVIRONMENTAL ANALYSIS 9 GAP INC; AN ENVIRONMENTAL ANALYSIS 10 GAP INC; AN ENVIRONMENTAL ANALYSIS 11