case study on gap international
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Year: 2002
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History
y In 1969, Don Fisher and his wife Doris opened thefirst GAP store in San Francisco. The company tookname from generation gap and targeted the late-teen customers and targeted on selling levis jeans.
y B y the end of 1970, there were six GAP stores already .y In 1980 GAP grown to about 500 stores.
y In 1985 first GapKids store was oppened.
y In 1990 GAP introduced bab y Gap in 25 GapKids
stores.y In 1995 GAP opened its first two stores outside the US,
both in Canada.
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y In 1994 GAP introduced Old Nav y brand.
y In 1997 Robert Fisher is named President of Gap
Division and GAP also opens its Online Store atGAP.COM.
y In 1998 the retailer opened its first Gapbody store and also introduced its onl y catalog(banana republic)
y In 2000 Gap misjudged fashion trends which resulted in disappointing earnings.
y In 2002 Paul Pressler is named GAP Inc. President and
CEO. Millard Drexler retires after 19 y ears of service.
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Issues and ProblemsySales were declining
yProblem in merchandising and marketing
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To extend the customer base
To maintain the same customer base
and to extend the product line.
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Financial analysisy Debt-equit y ratio.
y The cost of production not fairl y compensating the
revenue.y The stores sales weredecreased both in domestic and
international market.
y The y have to bear higher rate of interest on
borrowings.
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SWOT Analysis
yExternal en vironment
Opportunities:
Customization
Growth of minorit y segmentsInternational market
Internet
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Threats
y
Other casual clothing and mega-retailer
yEconom y
yInternational dynamics
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Internal environmentStrength:y Just one part of Gap Inc. targeted positioning.
y Large market sharey Brand recognition and equit y
y Number and location of stores
y High qualit y products
y A dditions of top designers and marketers to staff
y trained emlo y ees
y Management
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WEAKNESS
yPeriod of over-tension and lost focus
y Overall loss of customer trust
y Marketing is undifferentiated
y Length y period of time between product marketing and placement
y Lack of diverse sizes
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Strategy analysis
Corporate level strateg y y A ddition of new stores to their concept such as GapKids,
bab y Gap and Old Nav y .y A cquisition of Banana Republic.
Business level Strateg y y Creation of considerable Brand Differentiation b y
making considerable in vestment in brand image and in customer service.y Strateg y of cost leadership which includes economies of
scale, simple product design and low cost distribution.
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Recommendationy Enter into the emerging markets.
y Right merchandise, in the right place, at the right
time.y Can use catalogs to sell their products.
y Establishment of stores in the suburbs.