Case Study on Gap International

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Year: 2002



History

y In 1969, Don Fisher and his wife Doris opened thefirst GAP store in San Francisco. The company tookname from generation gap and targeted the late-teen customers and targeted on selling levis jeans.

y B y the end of 1970, there were six GAP stores already .y In 1980 GAP grown to about 500 stores.

y In 1985 first GapKids store was oppened.

y In 1990 GAP introduced bab y Gap in 25 GapKids

stores.y In 1995 GAP opened its first two stores outside the US,

both in Canada.



y In 1994 GAP introduced Old Nav y brand.

y In 1997 Robert Fisher is named President of Gap

Division and GAP also opens its Online Store atGAP.COM.

y In 1998 the retailer opened its first Gapbody store and also introduced its onl y catalog(banana republic)

y In 2000 Gap misjudged fashion trends which resulted in disappointing earnings.

y In 2002 Paul Pressler is named GAP Inc. President and

CEO. Millard Drexler retires after 19 y ears of service.



Issues and ProblemsySales were declining

yProblem in merchandising and marketing



To extend the customer base

To maintain the same customer base

and to extend the product line.



Financial analysisy Debt-equit y ratio.

y The cost of production not fairl y compensating the

revenue.y The stores sales weredecreased both in domestic and

international market.

y The y have to bear higher rate of interest on

borrowings.



SWOT Analysis

yExternal en vironment

Opportunities:

Customization

Growth of minorit y segmentsInternational market

Internet



Threats

y

Other casual clothing and mega-retailer

yEconom y

yInternational dynamics



Internal environmentStrength:y Just one part of Gap Inc. targeted positioning.

y Large market sharey Brand recognition and equit y

y Number and location of stores

y High qualit y products

y A dditions of top designers and marketers to staff

y trained emlo y ees

y Management



WEAKNESS

yPeriod of over-tension and lost focus

y Overall loss of customer trust

y Marketing is undifferentiated

y Length y period of time between product marketing and placement

y Lack of diverse sizes



Strategy analysis

Corporate level strateg y y A ddition of new stores to their concept such as GapKids,

bab y Gap and Old Nav y .y A cquisition of Banana Republic.

Business level Strateg y y Creation of considerable Brand Differentiation b y

making considerable in vestment in brand image and in customer service.y Strateg y of cost leadership which includes economies of

scale, simple product design and low cost distribution.



Recommendationy Enter into the emerging markets.

y Right merchandise, in the right place, at the right

time.y Can use catalogs to sell their products.

y Establishment of stores in the suburbs.

Documents

Case Study on Gap International