gap inc. - case analysis (strategic audit)

Anna OsmanayAnatolia College –American College of Thessaloniki (ACT)

GAP INC. – CASE ANALYSIS(STRATEGIC AUDIT)

GAP INC.: BACKGROUND One of the American “leading international

specialty retailers”

Offers apparel, accessories and personal care products for men, women, children and babies, under:

GapBanana RepublicOld NavyForth & Towe

STRATEGIC AUDITCurrent Situation

Current Performance: Net sales decreased by 8% compared to 2014.

Gap Global: negative 9 percent versus positive 1 percent last year

Banana Republic Global: positive 2 percent versus negative 10 percent last year

Old Navy Global: positive 3 percent versus positive 4 percent last year

Mission: “Gap Inc. is a brand-builder. We create emotional connections with customers around the world through inspiring product design, unique store experiences, and compelling marketing.”

Purpose statement: “Our purpose? Simply, to make it easier for you to express your personal style throughout your life. We have more than 150,000 passionate, talented people around the world who help bring this purpose to life for our customers.”

Corporate Governance:

Board of Directors: responsible for oversight of the business, affairs and integrity of the company, determination of the company's mission, long-term strategy and objectives.

Top Management: A diverse and talented executive management team focused on executing Gap Inc. strategy to engage customers and maximize shareholder returns

Fractions Weight (Total: 1)

Rating

Weighted Score

(WS:3.15)StrengthsBrand recognition .10 4 .40

Appeal to broad market target .15 5 .75Large network of physical stores

.15 5 .75

Marketing campaigns .10 3 .30

Cut 9 months production cycles to 3 months & customize deliveries

.10 3 .30

Weaknesses

Struggle to recapture customers who had abandoned it

.10 1 .10

Decline in revenues .15 2 .30

Overdependence on North America

.05 3 .15

Shut down of Forth and Towne .10 1 .10

INTERNAL ANALYSIS

EXTERNAL ANALYSIS Fractions Weight

(Total: 1) Rating

Weighted Score

(WS:3.15)OpportunitiesGrowth in online retail spending .10 4 .40

Line extensions (accessories, baby wear)

.15 5 .75

Markets in Southwest Asia .20 3 .60

Launch of Piperlime .10 3 .30

Threats

Shoppers switched to rival clothing retailers

.20 3 .60

Increased competition .10 2 .20

Remarkably easy to imitate .15 2 .30

RECOMMENDATIONS Better capitalize on its brand image andRecognition.

Gap also needs to realize the potential threat of European companies’ expansion into the United States and Canadian markets.

Further strategically restructure its product range by

increasing its lineup of plus sized apparel.