GAP Inc. Analysis

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GAP INC. ANALYSIS

GAP, Inc. is a worldwide retail company that operates as apparel in providing accessories, personal care products for men, women and children under its brands; Gap, Banana Republic, Old Navy, Piperlime, Athleta and Intermix brands. The company also provides maternity apparel, sports and fitness accessories as well as casual wear and luxury products(Businessweek.com, 2014).

It was founded in 1969 by Donald and Doris Fisher. This was because; Donald could not find a fitting pair of jeans. Therefore, Fisher decided that she rather sell jeans instead of buying them. From then on, the GAP retail saw its growth, expansion as well as global dominance(Farfan, 2013). From this, it is evident that the main goal and purpose of the company is to provide products that are in line with the tastes and preferences of its customers. In between the years 2004 and 2011, the company lost focus of its main goal and focused more on its financial goals which led to the down fall of the company. This was characterized by the decline in stock prices, negative profit margins and fall in its popularity.

After identification of how it had lost focus from its goals, the company has since made a tremendous improvement by shifting its focus from financial to customer based satisfaction, which has seen it come back to the top again. Currently, the company’s net sales have increased by 10% to $1.33 billion against $1.21 billion last year. The company whose headquarters is in San Francisco, California, has also seen the introduction of a new member to its management team. Marissa Webb has been announced by the Banana Republic, as the Creative Director and Executive Vice President of Design which was effective from April 28, 2014(Businessweek.com, 2014).The company operates 3,100 stores as well as 350 franchise stores in 90 countries. Through company-operated stores, franchise stores, e-commerce sites and catalogs, the company is able to provide its products to millions of people worldwide.

Swot Analysis

  1. Goals and objectives- this company’s main goal is to satisfy the customer’s tastes and preferences. Therefore, this forces the company to keep up with current trends in the society making this its main objective. For instance, since the company retails clothes as one of its products, the company has to provide clothes that are in line with the current fashion trend.
  2. Strengths- global brand recognition due to its worldwide based company-operated stores as well as franchise stores. Also provision of its multiple brands such as Gap, old navy, banana republic, piperlime and athleta have seen the popularity of the company grow and expanded the company’s customer and vendor base.
  3. Weaknesses- for a large company as GAP, the main weakness that it faces would have to be control of the company since its vast expansion has led to the emergence of various branches across the world. Therefore, it becomes difficult for management to manage the branches.
  4. Opportunities- the company has different individuals working for it who can help the company keep in line with the current emerging trends. Also the introduction of e-commerce services in the company helps boost total sales of the company due to the introduction of web based stores.
  5. Threats- a big company such as GAP faces many threats in its day to day operations. Some of these challenges include;
  1. Keeping up with current emerging trends is difficult due to changes in customer’s tastes and preferences as well as emerging trends in fashion.
  2. The company has grown to a level where it is difficult for top managers to control the various branches as well as departments of the company which are based worldwide.
  3. Implementation of new and creative ideas is slow due to the huge size of the company.
  4. Emergence of highly competitive apparel retail industries such as Abercrombie and Fitch.

Gap analysis of Gap Inc.

Measure of potential and actual performance of a company or the measure of optimum allocation of inputs compared to the current allocation is what is referred to as gap analysis (Jennings, 2000).

Gap Inc. is one of the major international retail companies that face many challenges in order to remain at the top in the retail industry. In spite of efforts put in by management as well as staff members to achieve this objective, the company has gaps within its system that slow down implementation of measures to realize this objective. Some of these gaps include;

  1. Opening of new stores in Europe and China. The company has plans in opening outlet stores in Asia and Europe. Plans are underway to open its first store in Italy and China. This is an opportunity for the expansion of its huge customer and vendor base but it is as well a gap since Asia and Europe are regions with different cultures and beliefs from those of America. Therefore, in order for employees to come into terms with the conditions for working within the Gap Inc. rules and regulations, they will require training (Marston & Modarres, 2002).
  2. Communication between the employees and management as well as between the company and its customers. The employees require communication training to improve their communication skills. This will help them to have better relations with senior most managers as well as amongst themselves such that in case of emergency or new lucrative ideas, immediate action is taken. This will also improve and make delivery of customer care services more efficient.
  3. Over reliance on third party vendors. Most of the merchandise is dependent on third parties outside the US. This causes delay in supplies, shortage of products as well as increase in costs such as production costs, storage costs and supply costs. These third party vendors require training to enable them have the ability to forecast the amount of merchandise they require for a certain period to avoid miscellaneous cost associated with shipment and storage.
  4. Keeping up with trends in the market is difficult and this is seen during the downfall of the company between the years 2004 and 2011. At the time it was declared that the company’s merchandise was not appealing to ladies. In order to keep up with emerging trends, the company can go into partnership with an art school and promote some of the products from the school under its brands. This encourages emergence of new products and the company could get new talented designers.

Training Needs Assessment

Due to the huge size of the company, for the needs assessment the best methods to use would be the use of interviews and questionnaires. This is because, not all employees or managers can be interviewed hence holding interviews with different branch managers would be appropriate. The interviews would be effective through the use of video calling via the internet to be able to interview branch managers from the different branches worldwide.

The use of the questionnaire would be most appropriate to send to customers especially those using the online based stores. For those going to the actual stores could be provided with the questionnaire during purchase of the merchandise or alternatively they could be given a website link where they could rate the performance and services offered by the company (Royse, 2009).

For the interview, questions asked are about;

  1. What they think about how competitors run their companies
  2. Their current sales strategies
  3. Their management practices in terms of communication with the employees, retailers as well as customers
  4. What are the challenges they are facing
  5. What ought to be done for the company to keep in line with emerging trends.

For the questionnaire, the customers are required to rate the company on the following;

  1. The efficiency of the customer care services provided
  2. Response of the company to issues that arise in case a customer has an issue with the product purchased
  3. For those using online based stores, how efficient are the delivery services of the company after making of an order.
  4. Is the customer satisfied with the quality of the products offered by the various brands of the company
  5. Comments on what needs to be implemented or avoided by the company.

The efficiency of this needs assessment would be realized if the results are taken into consideration and the changes and implementations made with immediate effect. This will help the company increase efficiency of the services they offer as well as help them keep in line with the emerging trends.

Conclusion

The training program that would be recommended for this company would be team building. This is because, team building brings together employees to work as a unit and also enhances communication amongst the employees. It also helps employees as well as management settle feuds among them. Also a customer service training would be required to improve efficiency of customer care service delivery.

References

Businessweek.com,. (2014). GAP INC/THE (GAP:German Stock Exchange): Stock Quote & Company Profile - Businessweek. Retrieved 14 May 2014, from http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=GAP:GR

Farfan, B. (2013). Behind Gap Inc. Earnings Report and Performance Success - How Glenn Murphy Led The Gap From Big Store Closings Back to Retail Relevance In Two Years (GPS, JCP, SHLD, RSH).About.com Retail Industry. Retrieved 14 May 2014, from http://retailindustry.about.com/b/2013/08/22/behind-gap-inc-earnings-report-and-performance-success-how-glenn-murphy-led-the-gap-from-big-store-closings-back-to-retail-relevance-in-two-years-gps-jcp-shld-rsh.htm

Jennings, M. (2000). Gap analysis: concepts, methods, and recent results*.Landscape Ecology,15(1), 5--20.

Marston, S., & Modarres, A. (2002). Flexible retailing: Gap Inc. and the multiple spaces of shopping in the United States.Tijdschrift Voor Economische En Sociale Geografie,93(1), 83--99.

Royse, D. (2009).Needs assessment(1st ed.). New York: Oxford University Press.

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