Gap Case Study Analysis

Cost Advantage: The job can be completed at a lower cost than the company may incur and with better quality at the same time. For example, the wages in India is a fraction of the same work done in other western countries. The cost savings is approximately 60 percent when outsource in India. In addition, the higher quality service ensures the company benefits from the high quality work can be done at a low price.

The central purpose of writing this Case Study Analyses on The Gap, Inc. is to identify and isolate key issues and their underlying implications and offer practical solutions and plans for implementing those solutions.

2) The company can increase its efficiency and focus on other areas of business if it outsources a particular process.

Firms pursue an international strategy in order to take advantage of the larger market for potential consumers and buyers of products and services on a global basis, as compared to the limited markets available in the home countries of businesses. In this way, expansion into the international market presents companies with a large scope for growth opportunities (Hitt et al., 2011, p. 219). Firms are also better able to earn a larger gain from their investments due to the larger potential market. Firms are able to ramp up production and other capabilities so that they can achieve better economies of scale and make the same quality products and services more cheaply. There is also bigger scope for performance and for innovation, since a diversity of markets offers a wide range possible strategies for bringing exciting new products to market and attempting new management and business strategies.

To get a better idea of how Gap Inc. is doing overall a variance analysis must be done. In addition various financial ratios must also be calculated. For the variance analysis the fiscal years of 2013 and 2015 are being examined and compared. The financial ratios that will be looked at are: working capital, current ratio, quick ratio, debt to equity ratio, debt to total assets ratio, inventory turnover, capital assets turnover, total assets turnover, return on total assets and return on equity. The return on equity, debt to equity and

In today 's competitive global marketplace, it is increasingly difficult to compete and successfully win your share of the business. With the current technologies, the global marketplace has shrunk and an organization of any size, or location can successfully compete and win business within the global marketplace. This has led to a number of businesses ' products and services becoming commodities. In a commodity type of business the price becomes the major decision point for a customer when they consider buying your product or service. Without a clear unique competitive advantage, these business are now forced to compete solely on price, which means their clients have very little loyalty towards their organization. This creates a unique dependency on the current economic and competitive pressures that drive many companies out of business.

They affect behavior and shopping habits of consumers and may be related to the release of new products or become a source of innovation for brands.

Companies are able to grow in many different ways. Two of those ways are international

For a company to reach international status the firm’s foundation must be rock solid. Once you have successfully started your business and continue to maintain the business the next step is to grow the business. Growing the business is essential to going global with the business for a couple reasons. One reason is that the costs alone for going international are substantial. Your business needs to go from being profitable to very lucrative in order to fit the bill for overseas costs. The second reason growing your business is important before going global has to do with the companies success formula. What happens if your business starts booming overseas at an

There are con’s and pro’s to the option of outsourcing. Organizations that choose to outsource are making the decision to displace their current workers. These were jobs that were once worked by people in the organization and now they are not faced with the dilemma of unemployment due to outsourcing. Outsourcing allows the organization to now eliminate the cost of handling payroll. In many instances, former employees are given the option to work for the company that has secured the contract but at lower rates and possibly reduced benefits or not benefits.

Development of specific skills: Out sourcing benefits the development of specific skills at a corporation level the same way off shoring does at a global level. Companies outsource in order to take advantage of specialized skills and knowledge that itself does not own or that can’t be efficiently acquired. In this case out sourcing leads to higher efficiency and better quality provided by third parties for a specific business processes. Moreover the third parties can further specialize to take advantage of the resulting economies of scale and mitigate the possible shortage of specific skilled and talented workers.

Global business is especially complex due to the the globalization of markets. There are significant cultural differences between countries and regions, sometimes there are even multiple cultures in a single country. However, businesses must learn new innovative ways to transcend distance and culture because if they do not their corporations will never grow. Expanding to foreign countries can provide a business with millions of new customers. In order to increase business, businesses must globalize. Luckily enough, this is becoming easier since trade barriers are starting to dissolve and communication to most parts of the world today are basically instantaneous. There are many ways a company can decide to expand internationally. One of

Outsourcing has improved organizational effective when applied as a strategy. Whenever companies outsource to improve financial performance they not only save costs but also achieve their economic goals and enhance their overall financial health. Outsourcing gives organizations to work cheaply efficient technology and economies of scale. Companies can improve their operation flexibility with the help of outsourcing. When a company controls all its business functions, then chances are that it may not respond to certain business conditions e.g. infrastructural changes. However, when a business has outsourced its functions, then it can always request for reductions or increases in these business functions. Outsourcing can be of advantage to

Trends in the marketplace can help determine areas a firm can explore to be successful. Use of carefully considered outsourcing can be a critical component of corporate strategy for any multinational corporation. With outsourcing opportunities in front of them, these corporations should first work to understand the demographics and capabilities of the workforce before making any moves. Companies shouldn 't simply resort to outsourcing and assume it would automatically translate to lower costs. It is important to study labor supply and demand, in order to

Outsourcing the business is in trend as it helps the company to cut the operational cost. It basically means the multinational companies handing over of their task like sales or collections, to another company on a target basis payment contract. This creates a win- win situation for both the companies as former one gets to save a lot of time, money and energy and the latter gets the business. India specifically is benefitted because of several reasons as a huge population of economical and effective labour resides in the country. India stands the second highest in possessing the english-speaking and computer friendly population. (Ahmedabad)