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GM512 The Gap, Inc. Company Proposal (For Group Assignment)

The document proposes analyzing The Gap, Inc. from a strategic management perspective. It provides background on Gap's international presence, status as a former leading apparel retailer, and private label strategy. It then discusses Gap's declining US sales leading it to close stores and lay off employees due to growing competition, losing its fashion edge, economic downturn, management issues, and possible overexpansion. Recommendations include innovating on competitors' strategies in the short-term and exploring online retail solutions long-term, as well as investing in viral marketing.

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Ah Beng
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359 views2 pages

GM512 The Gap, Inc. Company Proposal (For Group Assignment)

The document proposes analyzing The Gap, Inc. from a strategic management perspective. It provides background on Gap's international presence, status as a former leading apparel retailer, and private label strategy. It then discusses Gap's declining US sales leading it to close stores and lay off employees due to growing competition, losing its fashion edge, economic downturn, management issues, and possible overexpansion. Recommendations include innovating on competitors' strategies in the short-term and exploring online retail solutions long-term, as well as investing in viral marketing.

Uploaded by

Ah Beng
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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GM512 Proposed Group Project: THE GAP, INC. I propose The Gap, Inc.

(clothing retailer) from a strategic management point of view for several reasons. A. BACKGROUND 1. The first being that it is an international brand with presence/planned presence in emerging economies such as our very own Malaysia, Brazil, China & South Africa (via franchises). We can then cover such franchise agreements in such emerging economies as part of Gap Inc.'s strategy including its online apparel retail plan. 2. Formerly the world's largest apparel retailer, it is currently in second place after being surpassed by Inditex. This plays to our advantage as we will then be able to draw comparisons between The Gap, Inc. and Inditex with their different strategies. 3. We can also cover The Gap's Private Label Strategy which was adopted by Uniqlo as part of the background analysis.

B. IDENTIFICATION OF CURRENT ISSUES & C. ANALYSIS OF UNDERLYING CAUSES OF THE ISSUES Due to diminishing sales in the US, Gap Inc. will close more than one fifth of its stores by the end of this year of 2013 & layoff a sizable number of employees there. This is due to several factors:
(i) Growing competition from specialty retailers like Abercrombie & Fitch and

cheap chic merchants like H&M. We can also talk about brands like Zara. Loosing its fashion edge, no longer viewed as a leader in fashion as it once was in its early days. (ii) US economic downturn thus forcing Gap to look at other markets (specifically emerging economies such as China & Brazil where they plan to make it big) & downsizing its North American business. (iii) Management issues with changes in CEO as well as involvement of the Fisher family. (iv)Overexpansion perhaps? A case of opening too many stores, too quickly?

D. RECOMMENDATIONS & IMPLEMENTATION PLAN (to the CEO) How to restore The Gap as the industry leader? We can perhaps innovate on competitors' strategies that are doing well in the current market for the short-tomedium-term as well as explore online retail solutions for the long-term. Perhaps consider investing heavily in viral marketing (via facebook & twitter) .

REFERENCES: http://www.gapinc.com/content/gapinc/html/aboutus/keyfacts.html (Overview of Gap Inc. as it sees itself) http://www.google.com/finance? chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet =1358489034118&chddm=1173&chls=IntervalBasedLine&q=NYSE %3AGPS&ntsp=0&fct=big&ei=yeX4UKDmEsiJlAXbxAE (Stock price track record on The Gap Inc.) http://en.wikipedia.org/wiki/Gap_(clothing_retailer) (Excellent overview & analysis of the company) http://mmoore.ba.ttu.edu/ValuationReports/Summer2007/TheGap.pdf (Excellent overview of the company with detailed financial analysis & 5 Forces Model, which is said to be superior to SWOT analysis) http://www.thejakartapost.com/news/2011/10/14/gap-closing-stores-us.html (Article on Gap stores in US closing citing reasons for doing so) http://www.just-style.com/news/gymboree-poaches-another-gap-exec-for-cforole_id116622.aspx (Poaching of Gap's key top management personnel) http://finance.yahoo.com/q/is?s=GPS+Income+Statement&annual (Slightly diminished earnings in 2012 compared to 2011) http://web.mit.edu/wysockip/www/535/MIT2001/Gap3.pdf (Showing that Gap is highly susceptible to economic slowdowns) http://economicsfiles.pomona.edu/jlikens/SeniorSeminars/Likens2012/reports/Gap.pdf (I give this report an A+! A good example of how our group assignment should be but we must be careful not to draw too many ideas from it but rather come up with our own thoughts, analysis & recommendations)

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