Gap Inc SWOT Analysis

Strengths

• The Global Winter Clothing Market 2017 report for the USA indicates that Gap is set to be a top player in the 2017 clothing market, although Inditex and American Eagle Outfitters are also listed as key players in the industry for the upcoming season (World of Wall Street, 2017).
• Promising sales trends are reported in Gap Inc. brands Gap, Banana Republic and Old Navy as a result of improvements in the quality of the fit and look of products and increased flexibility in the organisations supply chain which allows the brand to adopt new trends more quickly, a quality that rivals Zara and H&M were traditionally better at (Wahba, 2017).
• Gap Inc's merchandise is now manufactured on a just-in-time basis, with a third of all stock being manufactured in a quarter as opposed to the nine months it used to take the company, and with more streamlined inventory systems being employed (Wahba, 2017).
• Gap Inc. clothes are available in 90 countries worldwide, with this being through 3300 stores operated by the company, and 400 franchise stores, as well as ecommerce sites (Gap, 2017b).

Weaknesses

• In the UK, a large number of Gap outlets have closed down, with the latest closure being reported at Preston's capital centre (Blog Preston, 2017). This indicates a sign of the waning popularity of the brand in the United Kingdom.
• In 2016, it was announced that Gap would shut down all of its Banana Republic shops in the UK in order to focus on North America to revive its sales, and with a further 75 Banana Republic and Old Navy stores being closed overseas (Reuters, 2016). While all 8 of the Banana Republic stores were closed by the end of 2016, the regional Banana Republic website remained functional (Reuters, 2016).
• Gap has been reported as struggling to draw in customers over the past few years, as shoppers in the U.K. market are increasingly turning to fast-fashion retailers such as Forever 21, Inditex's Zara and H&M (Reuters, 2016).

Opportunities

• Gap Inc. are currently experiencing a high dividend yield, which makes investment in the company an attractive proposition for investors based on the firms focus on leveraging the brand and supply chain improvements (Olson, 2017). This additional investment could provide Gap Inc. with the funds it needs to grow and expand the brand to new markets, or to innovate its current product offerings (Olson, 2017).
• In 2016, Gap utilised international style icon Olivia Palermo as the first-ever women's global style ambassador of the brand (Gap, 2017b). As a well-known celerity, this move served to increase the visibility and image of the brand, and is likely an opportunity for the brand to maintain a higher celebrity following and access to celebrities after Palermo wore a Gap piece to the 2017 CFDA Awards in New York (Gap, 2017b). Research shows that celebrity association to a brand can often allow for growth, increased visibility, and the capture of younger, image oriented consumers (Reimann, Wagner and Reisinger, 2017).
• In 2017, Gap announce it was launching a film cast styled and directed by Edward Enninful and featuring a number of well-known celebrities, including Priyanka Chopra, Wiz Khalifa and Christie Brinkley (Gap, 2017b). This presents the opportunity to in the future, produce more productions and present itself as a dynamic company that thinks outside of the box.

Threats

• In the increasingly digital world, one of the largest threats to Gap can be seen in entrepreneurial digital fashion brands, such as Modern Citizen, the brand that was established by a formed Gap employee and which has seen explosive growth since its establishment in 2014; growth which has allowed the organisation to open its first store (Lieber, 2017). Accordingly, digital brands are increasingly filling the void in fashion retail and forming digital revolutions to rival brands such as Gap and their other competitors such as Zara or Mango (Lieber, 2017).
• With Gap placing its entire UK-based merchandising team into consultation through a focus on the centralisation of its global operations in the United States, effectively closing down its UK merchandising operation, the quality and presentation of Gap stores as opposed to competitors such as Zara, who have a strong merchandising team in the UK, is threatened (McGregor and Hounslea, 2017).

SWOT Analysis Resources

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References

• Abrams, R. (2017) 'Protests in Bangladesh shake a global workshop for apparel.' New York Times. [Online] [Accessed on 16 July 2017] https://www.nytimes.com/2017/01/22/business/bangladesh-protest-apparel-clothing.html?rref=collection%2Ftimestopic%2FGap%2C%20The%2C%20Inc.
• Blog Preston. (2017) 'Gap Outlet in Preston displays a closing sign.' [Online] [Accessed on 27 July 2017] http://www.blogpreston.co.uk/2017/07/gap-outlet-in-preston-displays-a-closing-sign/
• Gap Inc. (2017a) 'aDressed.' [Online] [Accessed on 21 July 2017] https://adressed.gapinc.com/lgbtq-equality
• Gap Inc. (2017b) 'Be the World's favourite for American style.'[Online] [Accessed on 19 July 2017] http://www.gapinc.com/content/gapinc/html/aboutus.html
• Hemmingham, C. (2017) 'These Asda, Gap and B&M kids clothes are sparking controversy among shoppers.' Hull Daily Mail. [Online] [Accessed on 19 July 2017] http://www.hulldailymail.co.uk/whats-on/shopping/asda-gap-bm-kids-clothes-179565
• Ion, F. (2017) 'The future of augmented reality may actually be in shopping apps.' Android Central. [Online] [Accessed on 28 July 2017] https://www.androidcentral.com/future-augmented-reality-may-actually-be-shopping-apps
• Lieber, C. (2017) 'The Former Gap Employee Creating the Ultimate Zara Competitor.' Racked. [Online] [Accessed on 17 July 2017] https://www.racked.com/2017/7/7/15929830/modern-citizen-zara
• McGregor, K. and Hounslea, T. (2017) 'Gap to close down UK merchandising operation.' Drapers. [Online] [Accessed on 14 July 2017] https://www.drapersonline.com/news/gap-to-close-down-uk-merchandising-operation/7018370.article
• Olson, F. (2017) 'Is the Gap Inc (GPS) In Sound Financial Health?' Simply Wall Street. [Online] [Accessed on 25 July 2017] https://simplywall.st/news/2017/07/25/is-the-gap-inc-gps-in-sound-financial-health/
• Reimann, O., Wagner, U. and Reisinger, H. (2017) 'The Impact of Celebrity Endorsement and Celebrity Co-branding on Perceived Quality: The Role of Celebrity Application Frequency Within a Brand.' In: Advances in National Brand and Private Label Marketing (pp. 55-63). Springer, Cham.
• Reuters. (2016) 'Gap to shut all Banana Republic shops in the UK.' The Guardian. [Online] [Accessed on 19 July 2017] https://www.theguardian.com/uk-news/2016/oct/18/gap-to-shut-all-banana-republic-shops-in-the-uk
• Robin, C. (2017) 'Think Trump is an authoritarian? Look at his actions, not his words.' The Guardian. [Online] [Accessed on 19 July 2017] https://www.theguardian.com/commentisfree/2017/may/02/donald-trump-authoritarian-look-actions-not-words
• The Guardian. (2017) 'The Resistance Now: Big corporations come at Trump on climate.' [Online] [Accessed on 15 July 2017] https://www.theguardian.com/us-news/2017/mar/31/the-resistance-now-corporations-donald-trump-climate
• Wahba, P. (2017) 'Gap CEO Insists the Company Is Neither Sick nor Dying.' Fortune. [Online] [Accessed on 24 July 2017] http://fortune.com/2017/02/24/gapinc-results/
• World of Wall Street. (2017) 'Global Winter Clothing Market 2017 top players: GAP, American Eagle Outfitters, Backcountry.com and Inditex.' [Online] [Accessed on 27 July 2017] http://www.worldofwallstreet.us/global-winter-clothing-market-2017-top-players-gap-american-eagle-outfitters-backcountry-com-and-inditex/5820