This report includes the case study of Gap Inc from the aspect of strategic management.

1. GAP INC. - 2011 (CASE NO.6)

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GROUP MEMBERS:
Rami Abdullah Ba Hamid KBA 14035
Khaled Bark Shantof KBA 14034
Ateera bt Ahmad Dahalan KBA 16011
Nur Nadiah Salihah Binti Mat Razali KBA 15040
Nor Hazlina Binti Abdullah KBA 14032

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GAP’S ORIGINAL VISION & MISSION
Gap Inc. does not have an official company
mission or vision statement. But, they are
noted for claiming: “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.”

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REVISED VISION
Gap’s vision is to be the consumer’s first
choice in family retail clothing while
capitalizing on customer satisfaction and
shareholder value.

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REVISE MISSION
Gap’s desire nothing less than to satisfy the fashion desires of
their customers by providing quality yet affordable clothing
through their five competitive brands.
With passionate and fashion minded employees, the shopping
experiences for Gap clientele is incomparable, these
attributes allow Gap to be set apart from their competitors.
Gap desires to sustain a strong brand image by improving their
presences through the use of technology to build and maintain
brand awareness.

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GAP STRATEGIES
Consumers benefited
in several ways:
Customers
could return
products to
stores even if
they bought
them online

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EXTERNAL OPPORTUNITIES &
THREATS
EXTERNAL
OPPORTUNITIES
•Gap’s opportunity to
penetrate the market
overseas
•The falling price of cotton
•E- commerce expansion is up
by 10% growth rate through
2010-2015
•Growth in market for plus size
women (currently a 42 billion
dollar market)
•Growing the Athleta Market
EXTERNAL THREATS
•Too many stores in close
geographical area
•Unemployment rate is causing
consumers to spend less
•Consumers searching for lower
price
•Currency changes between
country
•Competitive retail market

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INTERNAL STRENGTHS AND
WEAKNESSES
strengths
•Brand recognition
•Strong distribution
•Financial position
•Divarication
weaknesses
• Depending on Outsider
vendors
•Low productivity
•Uncontrollable production
processes
•Low numbers of stores in
global market

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STRATEGIC PLANNING

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COMPETITIVE COMPILE MATRIX
(CPM)
CRITICAL SUCCESS
FACTORS
TJX Companies Abercrombie &
Fitch Co.
Nordstrom Inc. Gap Inc. American
Eagle Inc.
Weight Rating Score Rating Score Rating Score Rating Score Rating Score
Product diversity 0.15 3 0.45 3 0.45 3 0.45 4 0.60 2 0.30
Financial Position 0.10 4 0.40 3 0.30 3 0.30 3 0.30 3 0.30
Market Share 0.05 3 0.15 3 0.15 3 0.15 3 0.15 3 0.15
Brand name 0.15 4 0.60 3 0.45 3 0.45 4 0.60 3 0.45
Global Expansion 0.10 4 0.40 3 0.30 3 0.30 3 0.30 2 0.20
Price policy 0.10 4 0.40 3 0.30 3 0.30 3 0.30 3 0.30
Retailing channel 0.15 3 0.45 4 0.60 3 0.45 4 0.60 2 0.30
Marketing strategy 0.10 3 0.30 3 0.30 3 0.30 3 0.30 3 0.30
Technology 0.10 3 0.30 2 0.20 2 0.20 4 0.40 2 0.20
TOTAL 1.00 3.45 3.05 2.90 3.55 2.50

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EXTERNAL FACTOR EVALUATION
MATRIX - EFE
KEY EXTERNAL FACTORS Weight Rating Score
Opportunities
Green/Organic materials for clothes 0.05 2
0.10
Growth in plus size apparel 0.10 2
0.20
Growth of global market (Europe and Asia) 0.15 3
0.45
e-commerce trends 0.15 4
0.60
Threats
Rising of the production cost 0.15 2
0.30
Exchange rate 0.05 2
0.10
Growth of counterfeit products 0.10 3
0.30
Aggressive competitors 0.20 3
0.60
Unemployment rate 0.05 2
0.10
TOTAL 1.00 2.75

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INTERNAL FACTOR EVALUATION
MATRIX - IFE
KEY INTERNAL FACTORS Weight Rating Score
STRENGTHS
Brand recognition 0.16 3 0.48
Strong distribution channels 0.11 2 0.22
Financial position 0.10 2 0.20
Divarication 0.11 3 0.33
Technology 0.14 4 0.56
WEAKNESSES
Depending on Outsider vendors 0.10 3 0.30
Low productivity(decline sales) 0.15 2 0.30
Less attractive in trendy clothing 0.05 1 0.05
Uncontrollable production processes 0.05 1 0.05
Low numbers of stores in global market 0.15 3 0.45
TOTAL 1.00 2.89

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SWOT MATRIX
SO strategy
Gap Inc. having well-known brand and strong online
advantage.
using the latest technologies (online sales) to
increase their market shares and expand their market
target.
ST strategy
Gap Inc. can use the good reputation in market and
their brand recognition.

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CONT…
WO strategy
Gap Inc. able to maintain their distinctive competence
they can take advantage from market potential.
WT strategy:
Introduce new product in the market they may able to
avoid the threat of competitors.
Gap can improve sale position

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SPACE MATRIX
Gap Inc has major competitive advantages in a
high growth industry.

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Boston Consulting Group (BCG)
Matrix
• Gap has high relative market share position and high
industry sales growth rate.
• To represent best long-run opportunities for growth
and profitability.

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Internal-External (IE) Matrix
 Gap in the average phase hold and maintain
strategy that Gap has to their tactical strategies

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Grand Strategy Matrix
a strong competitive posit
need to concentrate on current markets and products
adopt market penetration and market development
strategies

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Quantitative Strategic Planning
Matrix (QSPM)
Strategic Alternatives
Market penetration Market
Development
Product
Development
Key External Factors Weight AS TAS AS TAS AS TAS
Economy 0.20 3 0.60 3 0.60 3 0.60
Political/ legal / Governmental 0.20 1
0.20
3 0.60 3 0.60
Social/ cultural / demo graphic
Environmental
0.10 3
0.30
3 0.30 3 0.30
Technological 0.25 3
0.75
3 0.75 2 0.50
Competitive 0.25 2
0.50
2 0.50 2 0.50
Key Internal Factors
Management 0.30 3
0.90
2 0.60 2 0.60
Marketing 0.10 2
0.20
2 0.20 2 0.20
Finance/ accounting 0.15 2
0.30
4 0.60 4 0.60
Production/ operations 0.15 3
0.50
3 0.40 3 0.40
Research and development 0.20 2
0.80
4 0.40 4 0.40
Management information
system
0.10 3 0.40 3 0.30 3 0.30
Total
5.45
5.25 5.00
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DEFENSIVE STRATEGY
Divestiture
Eliminate unprofitable outlet that needs more
capital.
Selling part of organization like shares and asse
in company.
Then, buy the new company with the money
from the selling.

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CONT….
 Can more focus on core business and
less diversify.
 Popular strategy: Gap Inc should closed
down the outlet in other countries not
bring profit.
 THE best way is closed the branch which
only gives loose to them. The operations
only gives burden.

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INTEGRATION STRATEGY
Forward Integration
Control over distributors.
Avoid any thieves problem and steal
packages in doorsteps.
The main is franchising: expand business
rapidly because cost and opportunity
spread rapidly.

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CONT….
 The company might be used this
opportunist to giving the license to make
franchising business. The franchisee may
adopt the business to be stronger and get
attention to increase sales volume.

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INTENSIVE STRATEGIES
Market Penetration
Increase market share for present products
with greater marketing efforts.
The celebrities in the Television, Film and
Sports also can use to promote the products.
The advertising, promotion and sales should be
do it frequently to attract customers to come to
the company.


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CONT….
 The company should follow the trends that customer
preferences. The company should make their
garments and apparel by their own. It can makes the
company able to generate income more. The
company already provide more capital on brand
image and recognition. marketing strategy must be
aggressively implement to attract people. The
launching must be do it separately between
teenagers, old and baby clothing to focus on trendy
and acceptable of people.

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CONT….
 The company also may do the corporate
social marketing . Operating principle is
simple: when the company build an
effective network relationship with
stakeholder, the profit will follow them.
 Example makes sales promotion items,
advertising and publicity.

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CONT….
Market Development
Introduce the products in new place with have
good target segmentation.
 The focus group also can be put at the
country which have four season, the cloth can
be made up the cotton to absorb the heat during
winter season. It must suit with the season.

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CONT….
Product Development
Makes Research and Development.
Modify present products. The product
development stage also stated the fourth stage
of product, which at the maturity stage need to
have some innovation or development.
Follow the trends and the changes very fast
and keep fickle.

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RECOMMENDED ANNUAL
OBJECTIVES AND POLICIES
 Stopping negative growth in sales.
 To strengthen brand loyalty among older
generation.
 To build brand preference among younger
generation.
 To reposition Gap brand itself.
 Positive growth sales.

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STRATEGY REVIEW AND
EVALUATION
 Focusing on how they can change their relationship
with suppliers and distributors
 Operational strategy must be link with broad
corporate strategy
 Cut down on scatter and huge number of suppliers
and focus on building dependable close yet very few
suppliers with long-term strategic relationship
 Build on process focused facilities in the medium to
long term period.

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CONCLUSION
 Feasible and efficient schedules of production
must be developed.
 Demands of human resources and facilities must
be determined and controlled

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THAT’S ALL…
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