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The Company

Brief History

Don Fisher & Doris Fisher

August 21, 1969San Francisco, California

Gap Inc. Brands

The Gap: 1969 GapKids & babyGap:

1986

Banana Republic: 1983

Old Navy: 1994

Piperlime: 2006

Athleta: 2008

Intermix: 2012

Gap Inc.’s Mission Statement

“Gap, Inc. is a brand-builder. We create

emotional connections with customers around the world through inspiring product design, unique store experiences, and compelling marketing.”

Gap Worldwide

Gap Improving Financially

2011 Online revenue exceeded $1.5 billion

Gap Inc. Reports fourth quarter earnings per share increase of 66%

8 % increase in net sales for 2012

Full year net sales grow by over $1 Billion to $15.7 billion

“Company of the Year in 2012”

Gap Inc. (GPS) Stock

5 Year Period

Current Stock: $33.73

Gap SWOT AnalysisStrengths Weaknesses

•Geographically dispersed•Strong brand recognition & image•Targeting multiple markets•All American & wholesome image•Strong ecommerce & website•Clothing allows for flexibility•P.A.C.E. Program•Gap outlet•Customer service

•Broad target market•Products too bland•Product line mesh•No labels to create belonging•Wholesome image and pre-teens•Dependence on too many vendors•Compete with own brands•Lack of advertisement

Opportunity Threats

•Growing apparel market•Foreign expansion•Expansion in e-commerce•Business casual •Eco friendly•Supply chain management•Pre-teens & teens (12-18) market

•Legal & political problems•Competitive market•Problems with sweatshops•Natural disasters & power shortages•Pricing pressure from competition•Substitutes for product & brand•Limited resources•Changing trends

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Markets

Market Size

U.S. retail clothing stores have annual revenues of $150 billion

Global apparel retail market to reach $1.3 trillion in 2014

Fabric sector estimating a 12 percent growth

Online buying becoming a more attractive option to customers

Gap Inc. showing 8% increase in comparable sales

Market Size Continued…

Total Revenues of $14,549 million

Profits of $833 million

March 29, 2012, held $12,729 million in market value with 3,085 store locations

Target Market

Price range between Banana Republic and Old Navy

Stylish, affordable, wholesome clothes

Targets infancy to late 40’s

Majority of advertising to ages of 25-40

Target Market Profile

Individuals, families, young couples

Middle to upper class income

Urban areas

Business or casual clothes

Work-oriented and conscious of their style

Potential Markets

Younger and ethnically diverse customers

Confused customers

Difficult to keep track of customer demand

Struggles to find the right customer

Brand Positioning

Target market grew up wearing competitors’ clothing

Appeals to customers with commercials and ads

Appealing to very large and varied age group

Companies using similar strategy

Advertisements

Dancing Commercial

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Competitors and Competitive Rivalry

National Competitors

Foreign Competitors

Family Clothing in the US - 2011

Global Apparel Retail - 2009

Market Composition

Strengths of Competitors

All have good to excellent brand awareness

Topshop & JCPenney- Multiple price points

Ross, TJX, & C&A- Low price point leaders

Ross & TJX- Home good products 

Sears- Customer loyalty & introducing new technology

H&M- Unique product at affordable prices

Fast Retailing, Topshop, TJX, & Ross- Variety of product lines

Continued Strengths…

Topshop- Niche stores, such as vintage boutiques Offering new services such as cafes, nail, & hair salon

Zara, H&M, & Topshop- Trendy styles

C&A, A&F, & H&M- Price on quality & value products

JCPenney- New renovations & technology throughout stores Diversified supplier base

C&A- Expanded into new forms of business in retail banking High brand awareness, family orientated, extensive

choices

Strengths Continued…

Topshop & A&F- Geographically well dispersed stores throughout globe

Fast Retailing & Topshop- Strong store networks

Zara & H&M- Speeding up delivery time on products

Zara- Highly responsive supply chain

Uniglo Clothing Chain- Expanded outside Japanese market with Fast Retailing stores CEO plans to shift to be more like the auto industry

concentrating on quality and spending less time on staying current with trends in clothing

Weaknesses of Competitors

Some have weak management and lack of scale in global market

C&A- Lack of targeted communication and quality fashion image Not adapting to meet local needs

Zara- No advertising campaign Stock outs

Sears- Cost structure problems

Weaknesses Continued…

Topshop & Ross- Poor quality or control management

Overwhelming store layouts

Weak customer service

Abercrombie & Fitch- Weak corporate structure

Fast Retailing- Meager operational efficiency Revenue is concentrated in Japan

Opportunities for Competitors

Expanding into New or Emerging Market

Growth through E-Commerce

Zara has Yet to Expand into US Market

Ross has Yet to Expand Outside US Market

Options to Create Discount Stores

Expansion of Product or Product Lines

H&M is the Biggest User of Organic Cotton

Threats for Competitors

New Entries into the Market

Global Market is in a Recession 

Fierce Competition

Constant Changing Trends on the Latest Fashion

Pressures to Cut Prices

Product or Brand Substitutions Now and in Future

Limited Resources can Lead to Legal or Political Threat for Companies

Strikes and Labor Issues in Foreign Factories

Natural Disaster and Power Outages

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Customers

The Gap Brand

“All American” colorful clothing basics

High product quality

Good service

Premium price ($15 & up)

Abercrombie & Fitch

Casual, sexy clothing

High product quality

Poor service

Premium price ($20 & up)

American Eagle Outfitters

Stylish, casual basics and outerwear

High product quality

Mediocre service

Premium price ($15 & up)

Buying Decision Factors

Brand values & image

Income level & cost

Location

Low involvement

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Recommendations

Philanthropy Base

Specific section in the store for socially responsible products

Give customers the opportunity to give back

Bring back the Inspi(red) clothing and other philanthropy based clothing

Teenage Market

Increase the teenage market

Advertise the “All American image”

Bring hip celebrities for marketing

Business World

Reach out into the new business casual work place

Customer Service

Strive to enhance customer service by seeking feedback in creative

ways