Gap Inc.’s Internal and Strategic Analyses

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Table of Contents

Executive summary
GAP’ mission
Introduction
Growth of Gap Inc
Internal analysis
SWOT analysis
Reference

Executive summary

Don Fisher started Gap Inc. in 1969. It specializes in making and marketing clothes following current fashion designs. The company has a portfolio of about 3191 stores worldwide with a workforce of more than 15000 employees. The company was started with a goal of satisfying its customer appetite for fashions in the world which has been achieved through the keeping of some of its values. The company has a production system divided into six phases. The company has a revenue of more than $15.9 billion.

GAP’ mission

GAP has a mission of making its customers express their customer’s style in their life by providing to them the best in the clothing industry. It strives every day to accomplish its mission through upholding certain values which have kept it as a market leader for a long period of time now. The key values that comprise the company’s culture include integrity, respect, open-mindedness, quality, and balance. These values and align with their goals which helps the company offer the best to its customers.

Introduction

Gap Inc. was established with an aim of helping customers to access clothes. It was founded by Don Fisher in 1969. Gap Inc. is the leading and the largest specialty retailer in the world. It has more than 3191 stores with revenue totaling more than $15.9 billion. Its line of operation includes Gap, banana republic, Old Navy, and Piper lime. It has infested a lot in customers’ satisfaction and corporate social responsibility.

Since its establishment, the company has undergone a lot of transformation to become the current leader it is in the clothing industry. It has been ranked as one of the leading companies in the clothing industry having been ranked at 53 in Universum survey in 2006, a top 100 company in Audit Integrity in 2007, and the corporate citizens. It has been recognized in many awards in the business cycle.

Growth of Gap Inc

From its formation in 1969 Gap experienced growth and in 1979 its sales had reached $2 million opening another store in San Jose. In 1976 it went public selling more about 1.2 million. In 1986 it opened its first Gap Kids store in San Mateo and in 1987 opened a store in London making a sale of 1 billion. In 1997 it opened an online store at gap.com and was named a marketer of the year. In 2003 Bob Fisher stepped down as the chairman and in 2004 it issued its social responsibility report. This shows how Gap Inc. has developed throughout the years to emerge as a leading company.

Internal analysis

Organization chart

In the management, Gap is headed by the Chairman who heads the board of directors. The day-to-day running of the company is headed by the Chief Executive officer who is also the president of the company. Drexler Millard was the first CEO of the company in 1983. Murphy is currently the Chairman and CEO. It has a workforce of more than 15,000 employees.

Production process

Gap makes its own clothes. The process of making the clothes is divided into 5 phases. Phase one involves the design and merchandising. Clothes are made according to the new designs in the market. Phase two involves planning and sourcing. This involves planning the whole production process. This takes into consideration the number of units that are going to be produced. Phase three involves production and marketing. Before production, samples and made to be confirmed fit for factory production. The marketing department then takes over in taking the samples to the merchants who approve the production.

The fourth phase is distribution. All clothes are distributed to their distribution centers. Phase fiver involves sales and analysis. This analysis helps in determining the performance of stores to know which needs more replenishing.

Financial analysis

The company recorded revenue of $15.9 billion. This translated to $0.93 earning per share. Among all the branches Old Navy branch recorded a turnover of $6.8 billion followed by Gap North America with $5.1 billion, while Banana and International recorded $2.5 billion and $1.5 billion respectively. However, the company has been recording decreasing sales in 2006. There was a 6 percent decrease in sales compared to the 8 percent decrease in 2006

SWOT analysis

Strengths

The company has a dedicated management team that has enabled it to prosper to great heights. Headed by a chairman the board of directors controls operations of the company. The CEO acts as the president of the company and controls the day-to-day activity of the company.

The strength of the company is in its chain store. With more than 3191 stores all over the world, the company is able to reach its customer and expand its market base.

The company also has a very efficient production system. This has enabled it to go to higher heights since it delivers quality products on time. (Burke, 1994)

Opportunities

There is a growing market for the fashion industry in the world that the company can exploit.

The growing number of fashion shows in the world can be used by the company to market its companies.

Weaknesses

The company has weaknesses in coordinating its sales due to its large operation structure.

Threats

The competition in the market is a big threat to the company since more and more players are coming into the industry. (Alef and Daniel, 1996)

Reference

Gap Inc. Web.

Burke, R. (1994). Project Management: Planning and Control. New York: Wiley.

Alef, E. & Daniel, B. (1996). The learning factory. Lanham: University Press of America.

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