Gap Incorporated

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TO: CEO of Gap Inc.
FROM: Andre’ Snead

I have conducted a company analysis on Gap Inc. and my findings resulted in the following recommendations to improve their sales for the next three years: * Gap Inc. need to produce a better advertisement campaign that relates more to their customers. * Fashion and brand-conscious consumers who shopped at retailers such as Gap tended to be emotionally driven in their purchasing behavior and were influenced by marketing efforts that showcased the store’s latest trends. According to Exhibit 1, buyers bargaining power is strong because they control what they purchase and from what retailer they purchase from. Buyers are more inclined to make wiser purchases because of the state of the
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Buyer Bargaining Power: Strong
Relied on independent third parties to manufacture the majority of their clothing. Mainly located in Asia, the Middle East, and South America
Supplier Bargaining Power: Strong

Rivalry among Competing Sellers:
Gap Inc., TJX Companies, Ross Stores, Abercrombie and Fitch.
Rivalry: Strong

New Entrants:
Uniqlo from Japan, H&M from Sweden, Zara from Spain (focused on youth 18-24). Extremely slim profit margins
Threat: Weak

Takeaways: * Not very attractive because of slim profit margins; it is critical for companies to have excellent financial management and inventory management skills to control cash flow, reduce debt, and keep costs low. * Brand image is critical because buyer bargaining power is strong; buyers are more price-sensitive because of the economy.

Exhibit 2 Key Success Factors: US Family Clothing Industry

* The ability to develop new product lines that reflected latest fashion trends * How quickly product lines can reach the new market * The number of similar stores in the buyer’s immediate shopping environment * The ability for a company to build brand loyalty

Takeaways: * The ability to build brand loyalty acts as a barrier to entry for potential new entrants to the market. * By developing new product lines that reflect the latest trends, companies can entice emotional customers to purchase their products.

Exhibit 3

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