Gap, Inc. Swot Essay

1226 Words Oct 19th, 2008 5 Pages
The Gap is a leading international retailer, whose revenues for 2007 surpassed $15.8 billion. As with any company, The Gap seeks to increase these revenues and to accomplish this task, they must analyze the external environment they operate in to determine the threats that exists and the opportunities to overcome. The Gap, as an incumbent firm, must try to maintain their position in the market by trying to increase barriers that prevent potential businesses from making a successful entry into the retail business. The threat from potential competitors is not as significant as the threat posed by the other incumbent companies in the retail industry which can leverage certain aspects of the external environment to negatively
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It is at these times where potential competitors may try to enter the market and provide clothing products for consumers. Thus, The Gap and Banana Republic may see declined revenues during this time because they serve a more expensive product line. However, Old Navy will bring in increased revenue for the company because they target the budgeter market. Additionally, all The Gap’s companies experience a great brand loyalty within the clothing market. Loyal customers know that when they go to The Gap’s stores they will find the latest styles to choose from and that they are getting a quality product as well. One additionally factor that increases the brand loyalty is the fact that The Gap uses well known personalities to market their products to their respective targeted base. This is one aspect that will assist The Gap in increasing the barriers that will prevent possible competitors for successfully entering the clothing business. Rivalry in the Retail Market The external factors that The Gap should be most concerned with will come from other incumbent retail companies that have resources to be a legitimate competitor. The 50 largest companies operate 30,000 stores and account for 65% of the industry’s revenue (Hoovers, 2008). These larger companies have the opportunities to leverage certain areas of the market that may concern The Gap’s strategic

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