MGT 599 slp 3: internal analysis Essay
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One of the strengths of Gap Inc would be its well known brands in the market that provided the said company with tremendous profit and market share namely: Gap, Old Navy and Banana Republic (Hollinger, 2004). These three clothing brand serve as the source of Gap Inc’s competitive advantage in the international market. Moreover, aside from its three major brands, another source of internal strength of Gap Inc would be its large number of store operating around the globe which is roughly equal to 4,100 stores. This enables Gap Inc to tap various market segments and increase its share in the international market. Furthermore, the unique style and design of Gap Inc’s cloths are the main reason why customers are continuously patronizing the product lines of the said company. The approximately 165,000 skilled employees of Gap Inc also serve as the pillar for high quality products that it produces into the market. Moreover, Gap Inc strategically operates in United States, United Kingdom, Canada, France, Japan, and Germany which have the largest potential market for Gap Inc. the last but not the least strength of Gap Inc would be its different price range which provides them with enough room to tap even consumers on a tight budget.
Gap Inc only concentrates its clothing line to young people thereby limiting the growth of the company into one market segment (Oppapers.com, 2006). Furthermore, by targeting only young people would require Gap Inc to innovate its product lines from time to time considering the fast-paced changes on the preferences of this consumer group. Another weakness of Gap Inc would be its quick changing of product lines in the market which requires extensive use of valuable resources to the company and for conducting research. Replenishing clothing lines in the market are too much expensive to do.
One of the opportunities that Gap Inc must utilize in order to maintain the pace of its growth would be to use the internet in expanding the market venue of the company and serve as additional medium for marketing its product lines (Tedeschi, 2005). Electronic advertisement is already one of the most effective means of product publicity and marketing Gap Inc’s product lines. Furthermore, there is a great possibility that sales volume of Gap Inc will improve through opening online stores in the internet. This will give Gap Inc enough room to expand its target market and promote its product lines on a mass scale. In addition to this, the elimination of textile quotas on various countries due to the influence of economic globalization, will give Gap Inc chances of increasing the volume of products that they export to other countries, which later on improves the sales growth and profit of the said company. The last but not the least opportunity for Gap Inc would be to launch business casual trend of clothing line to answer the glowing demand for business casual clothing. Through this, Gap Inc will be able to improve its product line and so with its market segment – young people.
One potential threat on the success of Gap Inc’s operation would be the slowing economy of those countries where it operates. Like for instance, the limited disposable income of American consumers caused by economic instability triggered the down turn of sales and profitability of Gap Inc in the United States. Furthermore, the intense market competition in the international market and the new emerging clothing lines produced by well known designers provides threat to the stability of Gap Inc as its customers shifts to their competitors. The last but not the least threat to Gap Inc would be the changing consumption behavior of consumers in the international market, e.g. changing of product preferences in just a short period of time. Though Gap Inc is already used to this kind of threat, still, given the market competition, it is a must for Gap Inc to maintain its customers on their side.
Hollinger, C. (2004). Gap Inc: The Way Forward. Retrieved May 30, 2008, from www.nrf-arts.org/presents/2004/retail/calvin.pdf
Oppapers.com (2006). Gap Inc. Retrieved May 30, 2008, from http://www.oppapers.com/essays/Gap-Inc/97288
Tedeschi, B. (2005). New Approach from Gap to Cut Down on Clicks. Retrieved May 30, 2008, from http://www.nytimes.com/2005/09/12/technology/12ecom.html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1212249704-k7R+1ZLc+1dmZkE800EVVw