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Gap inc
- 1. Gap Inc. Case StudyNo.19 Gap Inc By: Waqas Ahmad Gap Inc.
- 2. Gap Inc. The GapInc. is a diversified USA company dealing in the manufacture of Casual Apparel, accessories and personal care products for men, women and children. The company currently provides a wide range of family clothing products, including denim, and T-shirts, fashion apparel shoes, accessories, and personal care products. Opened : 1969 Net Income of 2007 1st Quarter 45 Million dollar CEO : Fisher Competitors : Nordstrom Inc, American Eagle Inc, TJX Companies and Abercrombie & Fitch Company.
- 5. External and InternalAnalysis Gap Inc.
- 6. Gap Inc. Strength Weakness DiversificationInefficient labor International reputation Decreasing sale Latest technology Inefficient inventory turnover As compare to competitors High EPR ratio Opportunity Threat Economic growth Shift purchasing priorities Industrial production Apparel market goes down Increase customers (Population) Asian competitors low level cost Low unemployment SWOT Analysis
- 7. Gap Inc. Internal StrategicFactors Weight Rating Weighted Score Strengths • Diversification .10 3 .30 • International reputation .20 3 .60 • Latest technology (Online transaction) .20 4 .80 • As compare to competitors High EPR ratio .10 4 .40 Weaknesses 000 0 • Inefficient labor .15 1 .15 • Decreasing sale .15 2 .03 • Inefficient inventory turnover .10 2 .20 TOTAL SCORES 1.00 2.48 IFE Matrix .
- 8. Gap Inc. EFE Matrix. External Strategic Factors Weight Rating Weighted Score Opportunities • Economic growth .20 2 0.4 • Industrial production .10 3 0.3 • Increase customers (Population) .10 2 0.2 • Low unemployment .10 2 0.2 Threats 000 0 • Shift purchasing priorities (to other Expenditures like education, food, health and housing expenses etc) .20 3 0.6 • Apparel market goes down .20 2 0.4 • Asian competitors low level cost .10 2 0.2 TOTAL SCORES 1.00 2.3
- 9. Gap Inc. Competitive ProfileMatrix (CPM) Critical Success Factor Weight Gap Inc Nordstrom Inc American Eagle Inc Rating Score Rating Score Rating Score 1. Advertising 0.25 3 0.75 3 0.75 3 0.75 2. Financial Position 0.1 4 0.40 4 0.40 3 0.30 3. Global Expansion 0.25 4 1.00 4 1.00 2 0.50 4. Market Share 0.1 3 0.30 3 0.30 3 0.30 5. Product Diversity 0.15 4 0.60 3 0.45 2 0.30 6. Consumer Demands 0.15 3 0.45 2 0.45 3 0.30 Total 1 3.50 3.30 2.45
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- 11. Gap Inc. Minor Problems •As compare to previous history sale is going down. • Underperformance 100 stores. • Increase employees turnover • Gap sold its German operations unit to H&M.
- 12. Gap Inc. Major Problem •CEO improper management
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- 14. Gap Inc. TOWS Analysisor SWOT Matrix Strengths – S S 1. Diversification S 2. International reputation S 3. Use latest technology S 4. High EPR ratio Weaknesses – W W1. Inefficient labor W2. Decreasing sale W3. Inefficient inventory turnover Opportunities – O O1. Economic growth O2.Industrial production O3.Increase customers O4.Low unemployment S2O1 S3O2 W1O1 W2O1 Threats – T T1. Shift purchasing priorities T2. Apparel market goes down T3. Asian competitors low level cost S2T3 S3T1 W1T3 W2T2
- 15. Interpretation of SWOTMatrix S2O1: The Gap Inc. having good market reputation though this they can acquire more shares in the market if they introduce new product in the same market (Product Development strategy) S3O2: By using the latest technologies the Gap Inc can able to increase their market shares. W1O1: If Gap Inc. able to maintain their distinctive competence they can take advantage from market potential.(Market penetration) W2O1: By increasing or by properly utilizing the technical personnel Gap may able to capture more shares in the growing market.
- 16. Interpretation of SWOTMatrix S2T3: The Gap Inc has good reputation in market, if they able to maintain their good reputation they can easily take lead from their competitors. S3T1: The Gap Inc using latest technology for their production to make them more effective and efficient, by this they can easily take a competitive advantage and can overcome on the competitors in the market. W1T3: If Gap Inc able to overcome and increase or maintain their distinctive competence they can easily compete with their competitors. If they introduce new product in the market they may able to avoid the threat of competitors. (Product development) W2T2: By increasing or properly utilizing their technical labors and start advertisements, Gap can again improve sale position.
- 17. Financial Strength (FS) •Earningsper share : 4 •Liquidity : 3 •Inventory turnover : 3 Competitive Advantage (CA) •Product quality : -3 •Technological know-how : -3 •Market Share : -2 Environmental Stability (ES) •Price elasticity of demand : -4 •Competitive pressure : -3 •Price range of competing products: -4 Industry Strength (IS) •Ease of entry into market : 3 •Growth potential : 4 •Profit potential : 4 Space Matrix
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- 19. Gap Inc. The BCGMatrix
- 20. Gap Inc. IE Matrix III III IV V VI VII VIII IX EFEWeightedScores IFE Weighted Scores 4.0 3.0 2.0 1.0 4.0 3.0 2.0 1.0
- 21. Gap Inc. Recommended Strategyand Plan ofRecommended Strategy and Plan of actionaction
- 22. Gap Inc. Quantitative StrategicPlanning Matrix (QSPM) Strategic Alternatives Key External Factors Weight Market Development Product Development Economy 0.20 3 0.60 3 0.60 Political/Legal/Governmental 0.20 1 0.20 3 0.60 Social/Cultural/Demographic/Environ mental 0.10 3 0.30 3 0.30 Technological 0.25 3 0.75 2 0.50 Competitive 0.25 2 0.50 2 0.50 1.00 Key Internal Factors Management 0.30 3 0.90 2 0.60 Marketing 0.10 2 0.20 2 0.20 Finance/Accounting 0.15 2 0.30 4 0.60 Production/Operations 0.15 3 0.45 3 0.45 Research and Development 0.20 2 0.40 4 0.80 Computer Information Systems 0.10 3 0.40 3 0.30 Total: 1.00 5.00 5.45
- 23. Gap Inc. Recommended Strategy ProductdeveloPment is the recommended strategy for gaP
Editor's Notes
- #2 Introduction About Self Outline Presentation Gap Inc. Business Product Lifecycle Potential Career Q & A Gap Inc. and its 3 brands, Gap, Old Navy and Banana Republic, is the largest apparel specialty retailer in the US. We have stores and operations around the globe. Sales of $16B in 2003