Business Report: GAP's Competitive Landscape and Strategies

This report provides a comprehensive analysis of GAP, an American clothing and accessories retailer. It begins with a company overview, detailing GAP's history, operations, and market position. The report then delves into competitive advantages, exploring analytical tools such as PESTLE analysis, which examines political, economic, social, technological, environmental, and legal factors impacting GAP's business. Porter's Five Forces analysis is used to assess the competitive intensity within the industry. The report also examines GAP's marketing mix, including product, price, place, promotion, people, process, and physical evidence strategies. Finally, the report offers recommendations for improving GAP's sales and performance by leveraging product differentiation and employee incentives, aiming to increase customer attraction and enhance the company's competitive edge. The report concludes by emphasizing the importance of understanding the market and adapting to changes to maintain a strong position in the industry.

Individual report GAP

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Company Overview.........................................................................................................................1
Competitive advantage.....................................................................................................................1
PESTLE Analysis .......................................................................................................................1
Porter's Five Force Analysis .......................................................................................................2
Marketing Mix ............................................................................................................................3
Recommendations............................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Business is the set of activity, people work together to earn profit they transfer the raw
materials into finished goods and sale product in order to increase profits and generate revenue.
Organization and entrepreneur do business in order to make innovative and new product that
helps entrepreneur to implement their new ideas into business and launch the new product in new
market. In a business, people work to make and sell products or services. A business can earn a
profit for the products and services it offers (Qian and Pan, 2019).
The present report is based on business of GAP. It is an American worldwide clothing
and accessories retailer. Thus, it is the world largest clothing firm serves their service in all over
the world. The famous clothing of GAP is best known for its Apparel, Accessories, Personal care
products. The report will cover the company overview, different analytical tool to identify the
competitive advantage. Lastly, report will describe some recommendation that how to improve
the firm profitability.
Company Overview
GAP is an American clothing and accessories retailer company that was founded by
Donald Fisher in 1969. Its headquarter is located at San Francisco, California. It is operating in
six divisions such as banana republic, Old navy, Intermix, Hill city and Athleta. The Largest
retailer of clothes and accessories and stood 3rd at international level. It is having approximately
135000 employees and operating its business in 3727 stores worldwide. Whole family is
involved in the company. It is having more customer attraction that helps in easy growth and
brings more opportunities for the future. In beginning when it is started more consumers are
attracted towards it. It provides quality product to its consumers that help in satisfying its needs
and demands.
Competitive advantage
There are different tools that are used in achieving competitive advantage are as follows:
PESTLE Analysis
This includes different factors such as political, economic, social, technological,
environmental and legal factors (Racz and et. al., 2018). All these component affect business
operations and may lead to decrease growth in the market.
Political Factors
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Changes in tax rates and tariff that will affect business of GAP company as it is dealing
in apparel so after changing in rates trade is becoming difficult from other countries. Due to
political instability in country that have greater impact on business in the future. There is a risk
of military invasion from other countries that may cause disinvestment in the country (Touchette,
Schanski and Lee, 2015).Economic Factors
Due to high level of unemployment there is scarcity of skilled workers that will be able to
work in the company. Another problem that arises is that regarding changes in exchange rates
that affect foreign trade and impact on business operations. Changes in interest rates impact on
investment that is done in other countries.
Social Factors
Different countries are having different culture so that affect working operation in other
countries. It also includes educational level of people and standard that is maintained in country
that affects operations in the future. Attitude of people also having impact as they are conscious
regarding health that may increase operational cost of GAP Company.
Technological Factors
Changes in technology increase operational cost as new technology needed more
investment so due to this lead to provide different perspective in the company. Because of
changes in technology that lead to create an impact on product that is manufacture by GAP.
Value chain structure of GAP get disturbed due to implementation of technology (Tara, Singh
and Kumar, 2015).
Environmental Factors
Before doing business in other country it is important to evaluate environmental
condition of the country in which business is going to be started in the future. As changes in
weather affect business as if company is making clothes for summer and due to weather changed
Consumer demand for winter wear so in that condition GAP have to bear loss.
Legal Factors
Due to changes in laws it is important to protect data as ideas and patents that affect
intellectual property of business. Health and safety laws will affect working environment in
company as employees are not regular in working due to which company's operation get
disturbed. Discrimination laws are related to equal treatment of employees in GAP if they are not
treated equally then have greater impact on business (Crick and Crick, 2015).
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Porter's Five Force Analysis
This tool is used in analysing overall competition in the marketplace that affects business
operations of GAP. This includes different forces such as:
Rivalry among existing firms
It mainly emphasizes on competitors that are available in the market that affect business
operations. By providing differentiated product to consumers helps in competing against other
rivalry firms in the market (Bull and et. al., 2016). As GAP is generating enough product that
will not affect its profitability. Collaboration with other companies will help in gathering more
market share.
Bargaining power of Supplier
GAP is purchasing its raw material from different suppliers so they don't have to depend
on one supplier so this will increase bargaining power with supplier of business. By designing
different materials that provide different aspect to suppliers as different designing product is
being manufactured in company (Fozer, D. and et. al., 2017).In this third party is being created
so that it can shift to other suppliers for purchasing material.
Bargaining power of buyer
By providing large base of consumers in the market that provide an opportunity for
consumers to lower down price of apparel that is sold by GAP. As consumers always want some
new thing so by providing they innovate items that offer variety of products to its consumers
(Crick and Crick, 2015).
Threat of new entrants
Competitors are the biggest threat for GAP that provides competition in the market.
Innovating products that is manufactured into business will create more competition and through
this operational cost is increasing that will lead to create problem for the future course of action.
Threat of substitute products
New product that is implemented into market of similar product line then this will
become threat for GAP (Ansah and Sorooshian, 2017). Consumers are switching from one
product to another that create problem for the company as it is losing consumer attraction.
Marketing Mix
As Gap is positioning its product into the market by using repositioning strategy that is to
be followed in providing various brands to its customers. By using positioning map it set an idea
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of position its product into the market. Marketing mix is the tool or framework that helps firm to
identify the target market and potential customer. It is a set of combination of factors that can be
controlled by a company to influence consumers to purchase its products. Thus, this is the set of
tool that firm used to achieve the objective and influence the customer in order to enhance the
demand. There are 7 broad level of factors which is people, Product, price, process, place,
promotion, physical evidence (Manai and Holmlund, 2015).
Product
It refers to goods and services that are manufactured by company for the purpose of sell
in the market. Gap is dealing in clothing and accessories that provide its services worldwide. It is
providing products such as shirts, jackets, jeans etc. As it is providing wide range of products to
its consumers that help in satisfying its needs and demands. It is providing quality products to its
consumers. For increasing sales it is necessary to do branding of product as Gap is doing
branding by advertise its product into the market. Offers and discount is provided to regular
consumers that help in attracting more customers towards Gap (Phadermrod, Crowder and Wills,
2019).
Price
It means amount that is paid by consumer to buy product or services from company. As
in UK market, Gap is a leader in providing clothing and accessories and gaining competitive
advantage in the marketplace. It is following a competitive pricing strategy that facilitate larger
market share. As consumers are buying goods and services after seeing price of product that
makes it sensitive in the market. It charges greater price of products as it sells online this is
because as the delivery charges are included in it.
Place
GAP sells its products through two distribution channels. Firstly it sells directly to
customers through online website and secondly it sells to wholesaler’s sand than to sell to
different retailers located all over the country. Presently it is having 500 retailers throughout the
country and it follows intensive strategy of marketing where they try to include their products as
many retailers as possible (Bull and et. al., 2016).
Promotion
GAP Inc. uses the multiple media channels to promote their products, also uses
traditional media that includes an advertisement on television and radio. It is beneficial due to its
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large reach as well as ability to attract large number of customers (Ansah and Sorooshian, 2017).
It uses the online and social media advertising that is cheaper and good as it increases the usage
of internet. It undergoes to various sales promotion that is taking part in various exhibitions of
trade and the events around the year. They can also use the digital marketing technique in order
to improve online traffic .
People
Gap Inc has people that are working under their sales team as it plays the vital role in
their marketing efforts. These people have been trained in persuasive technique, at the same it
also shows the respect to the customers of their company that are taking it as their preferences.
Employees of GAP should also undergo in trainings for their sales force, customer services and
purchasing people as it plays the vital role in delivering the value to its customers and can also
hire the people that give the respect to customers and committed to company (Chang, and Jai,
2015).
Process
Gap Inc. also has to make sure that their products are always available at their retail
stores and having the system installed as retailers can notify that their inventory levels are low. It
also ensures that their products are always available to customers when it needed. They should
also use computers across to handle its various process that increase efficiency and timely
delivery to its customers.
Physical Evidence
They sell their products in distinct colour packaging that are easily identifiable in retail
shelves. These are being placed on special shelves that are being provided by the company as it
also having distinct colour and design. They should also have to collect feedback from their
customers so they can improve on this (Racz, L. and et. al., 2018). Even in the organisation there
must be having the relationship in between the finance and marketing department as they work in
coordination they can increase the revenue of the company.
Recommendations
It is being recommended for the company that they can improve their sales and
performance by applying the different techniques as well as marketing strategies so they can
reduce the issues in order to attract large number of customers. As the competitive advantage
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creates the superior value above its rival and wants the gap between perceived value and cost of
the product is to be greater than the competition. They can do the product differentiation as it is
being achieved by offering the valued variation of physical product. It is easy for the companies
that they have to use these characteristics in order to promote the product in the future. They also
have to provide the opportunity for employees to give high wages so that the employees can
work for the long period and can retain thus it reduces the employee turnover rate. After the next
2 years company wants to see that there sales is to increase by 30% and after 5 years they can
have 10 more outlets in the international location.
CONCLUSION
From the above project report it can be summarized that business is the activity of
innovation, individual make the innovative product with an innovative idea, and implement these
ideas in the business in order to generate and earn profits. This is the process of earn profits by
providing goods or services to the customer in exchange for money.
This report based on business activity of GAP. The report has described the swot analysis
in order to identify the strength, weakness, threat, and opportunity. Thus, when firm identify the
strength and threat they should implement the new strategies in the business and attracts
customer. Furthermore, report has explained the marketing mix of GAP this strategy helps to
target the customer and influence the customer by using the different promotional activities
lastly, report has described some recommendation that helps organization to expend their
business.
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REFERENCES
Books and Journals
Ansah, R.H. and Sorooshian, S., 2017. Effect of lean tools to control external environment risks
of construction projects. Sustainable cities and society. 32.pp.348-356.
Bull, J.W. and et. al., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT
analysis of the ecosystem services framework. Ecosystem services.17.pp.99-111.
Chang, H.J. and Jai, T.M., 2015. Is fast fashion sustainable? The effect of positioning strategies
on consumers’ attitudes and purchase intentions. Social Responsibility Journal.11(4).
pp.853-867.
Crick, D. and Crick, J., 2015. Learning and decision making in marketing planning: a study of
New Zealand vineyards. Marketing Intelligence & Planning. 33(5). pp.707-732.
Fozer, D. and et. al., 2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS
process alternatives. Journal of cleaner production.147.pp.75-85.
Manai, A. and Holmlund, M., 2015. Self-marketing brand skills for business students. Marketing
Intelligence & Planning, 33(5), pp.749-762.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management. 44.pp.194-203.
Racz, L. and et. al., 2018. Extensive comparison of biodiesel production alternatives with life
cycle, PESTLE and multi-criteria decision analyses. Clean Technologies and
Environmental Policy.20(9).pp.2013-2024.
Tara, K., Singh, S. and Kumar, R., 2015. Green marketing: The new strategic imperative by
firms in India. Indian Journal of Marketing, 45(7), pp.19-34.
Touchette, B., Schanski, M. and Lee, S.E., 2015. Apparel brands’ use of Facebook: an
exploratory content analysis of branded entertainment. Journal of Fashion Marketing and
Management, 19(2), pp.107-119.
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