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Gap Inc. Case Study

Strategic Management
by

Nicole Stern

on 8 March 2016

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Transcript of Gap Inc. Case Study

Fashion &
Competitive Landscape

Gap Inc.
Company Overview
$16 billion global clothing and accessories retail conglomerate
Headquartered in San Francisco, California
Operating in over 50 countries
Online reach to consumers in over 90 countries

History:
1969: Gap founded and first store opened in SF
1970's: Gap Inc goes public
1980's: Banana Republic acquired and first international store opens in London
1990's: Old Navy opens in CA and Gap debuts online shopping
2000's: Gap publishes annual CSR report and acquires Athleta
2010's: First stores open in China and INTERMIX acquired
Current Challenge
Struggles to capture customer loyalty and generate satisfaction by differentiating itself and outperforming intense competition in an oversaturated market.
Fashion Industry Overview
Is comprised of clothing, accessories, and footwear
Competition is high with consumers holding high buying power
Technology and online shopping has changed the game
There has been a dramatic increase in the speed of trends - less emphasis on Spring, Summer, Fall, Winter clothing lines
Recommendations
Financials
Compound annual EPS growth of 15% over last 5 years; U.S. peer mean of - 38%
Over $16 billion in revenue in 2014 and 2015
15% average annual adjusted return on invested capital over the past three years
Brand strength and economies of scale
Market Positioning
Strategic Management Case Study
Wini, Melissa, Meredith and Nicole

Recommendations
Grow

global footprint through acquisition of new products & focus growth on current brands through refocusing on current brands

Operation under
status quo
is not an option for Gap Inc. as a few of its brands, including the flagship brand, continue to lose market share.

Banana Republic needs to
retrench
in order to focus on rebuilding their original target demographic or identify their future target market.

A combination strategy will be required to address the challenges of each unique market/brand in order to increase revenues and drive global growth.

Summary
In order to combat current challenges...
Strengthen customer loyalty
Combat competition in the market
Enhance identity of individual brands

...Gap needs to focus on:
1. Reducing design to sale cycle
2. Solidify Omni-channel experience
3. Identify and penetrate consistent target segments
"We used to talk about the ‘Gapification of America,’ that notion of one size fits all," says WSL’s Liebmann. "That’s just not a proposition relevant to America now."

- Wendy Liebmann, CEO of WSL Strategic Retail
Recommendations by Brand
What clothing retail brands would you say our team is wearing?
SWOT Analysis
Full transcript