Gap Inc Essay

613 Words Sep 12th, 2013 3 Pages
Gap Inc. in 2010: Is the turnaround strategy working?

Gap Inc. is a leading international specialty retailer offering clothing, accessories and personal care products for men, women, children and babies. Gap owned and operated more than 3,100 Gap, Banana Republic and Old Navy stores world wide in 2010. With stores located in the U.S, UK, Canada, France, Japan and Germany, Gap Inc. employees nearly 165,000 employees world wide.

Since 2002 Gap Inc. has been a number of issues including the declining sales of the family clothing store industry. During this time many turnaround strategies have been implemented in the attempt to eliminate long term debt, redesign the companies online presence, create a new e-commerce platform, expensing
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The threat of new entrants is week due to high entry barriers and the uncertain outlook of the industry. Additionally, the threat of substitute product is also strong but bargaining power of supplier is weak due to this high number of substitute products. Alternatively the buyer bargaining power is strong due to low switching costs and low levels of undifferentiated products. The intensity of competition has also increased significantly increased leading to a reduction in buyer demands due to the recession that started in 2008.

After analysing the case three key strategic issues and problems facing Gap Inc. become prominent. These strategic issues facing Gap Inc. consist of technology advancements, reaching Economies of Scale and gaining a Competitive Advantage over rivals and substitute products. There are several possible alternatives that Gap Inc. could implement in its next stage of turnaround strategies to help increase market share and sales. These include; * Creating new product lines and ensuring on trend product design. (e.g. increase lines in plus size segmentation.) * Segmenting their target market. (e.g. having one store for 18-24 and another for 25-35 to better capitalise on market needs.) * Further expanding their operations into foreign markets especially in the areas of e-commerce. (e.g. expanding into the developing markets of China and India) *

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