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Swot Gap

This document outlines the strengths, weaknesses, opportunities, and threats for clothing retailer GAP. Some of GAP's key strengths include its global brand recognition, over 3,000 stores worldwide, ability to franchise internationally, and multiple brands. Weaknesses include reliance on third-party vendors, large store base that is difficult to control, and less trendy clothing than competitors. Opportunities exist in expanding to new global markets like Europe and China, growing e-commerce sales, and finding new designers. Threats include economic downturns hurting apparel sales, intense competition, fast fashion retailers delivering trends quicker, and competitive real estate markets.

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ArslanFarooq
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110 views

Swot Gap

This document outlines the strengths, weaknesses, opportunities, and threats for clothing retailer GAP. Some of GAP's key strengths include its global brand recognition, over 3,000 stores worldwide, ability to franchise internationally, and multiple brands. Weaknesses include reliance on third-party vendors, large store base that is difficult to control, and less trendy clothing than competitors. Opportunities exist in expanding to new global markets like Europe and China, growing e-commerce sales, and finding new designers. Threats include economic downturns hurting apparel sales, intense competition, fast fashion retailers delivering trends quicker, and competitive real estate markets.

Uploaded by

ArslanFarooq
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Strengths:

Global brand recognition


GAP is globally recognized as american style, pop culture and the emotional
affinity.

Stores located in worldwide


GAP has 3,095 stores in worldwide as of January 30, 2010.
Company-owned stores are located in United States, United Kingdom, Japan,
Canada, France and Ireland.
Franchisees-owned stores are located in other countries such as Turkey, United
Arab Emirates ans so on.

Franchising system easily to expand Gap store internationally


GAP has franchise agreements with unaffiliated franchisees to operate Gap or
Banana Republic brand stores worldwide.

Multiple brands and brand extensions for a wide range of segments


GAP has 5 distinct brands such as Gap, Old Navy, Banana Republic, Piperlime and
Athleta and
brand extensions such as GapKids, babyGap, gapbody and GapMaternity.

Huge customer and vendor base

Weaknesses:

Nearly all merchandise depend on third-party vendors, which is outside of the US.
Approximately 1000 vendors in 60 countries. 27 percent is produced in China.
Third-party vendors can cause products shortage, shipment delay and increased
costs.

Huge store base including unaffiliated franchisees


Gap is limited to keep up with fashion trends, to train some methods and to
control quality.

Less attractive in trendy clothing


Gaps product lines are less attractive clothing to consumers who are interested in
trendy clothing than competitors

Uncontrollable production processes


Control of production processes is a key factor among fast fashion retailers

Opportunities:

Global new market in Europe and China


GAP is planing to open the 1st store in Italy and China and additional outlet stores
in Europe and Asia

Penetration of e-commerce
Gap has introduced web-based stores and has two additional online based stores.
Sales related to Athleta in 2009 increased 9 percent while total sales of Gap
decreased 3 percent
Online sales in 2008 increased 14 percent compared with 2007.

Difficult anticipation of fashion trends and changing consumer preferences


Many companies have experienced to misjudge the market.

Threats:

Economic downturn directly affect apparel retail business


Continuing economic downturn could make consumer spending remain depressed
for an extended period.
Apparel sales were off by -9% compared to 2008

Global specialty apparel retail industry is highly competitive


J. crew, Abercrombie & Fitch, Urban Outfitters, etc

Emerging fast fashion retailers


H&M, Forever21, Inditex(Zara), Primark
Zara delivers new items twice a week to the stores.

The market for prime real estate is competitive


The location of GAP stores is a key factor of its strategy.

Recommendation: How about the following as one of recommendations.


To keep up with trends in the market is very difficult, but necessary. And most of
companies in the market sometimes have failed to produce trendy clothing and affected
the companies financial statements. Also, this impact is written in the annual report of
Gap. So, a recommendation is to make a partnership with art school and to market
some trial products with the brand of Gap and a immature designer in the school. This
also makes an opportunities to find talented designers.
Reference:
Annual report:
http://www.gapinc.com/public/documents/GPS_AR_09.pdf
Wikipedia:
http://en.wikipedia.org/wiki/Gap_%28clothing_retailer%29
http://en.wikipedia.org/wiki/Fast_fashion
Apparel market report:
http://www.mastercardadvisors.com/us/advisors/en/pdf/SP_Apparel_MAY-09.pdf
Wikiinvest:
http://www.wikinvest.com/stock/Gap_%28GPS%29

http://www.wikinvest.com/stock/Abercrombie_%26_Fitch_Company_%28ANF%29
http://www.wikinvest.com/wiki/Urban_Outfitters_%28URBN%29
Industry report:
http://news.morningstar.com/articlenet/article.aspx?id=337795&pgid=rss
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