The Gap
...Analysis Page 4
Five Forces Analysis Page 9
Internal/External SWOT Analysis Page 12
VRIO Analysis Page 14
Financial Analysis Page 15
Analysis of Alternative Page 19
Summary of Recommendations Page 20
Implementation Plan Page 21
Reference Page 202
Appendix A Dupont System Analysis Worksheet Page 23
Appendix B Ration Analysis Worksheet Page 24
Table of Figures
Figure 1: Sales Revenue/Cost of Goods Sold Page 16
Figure 2: Net Profit Margin Page 16
Figure 3: Return on Total Assets Page 17
Figure 4: Return on Common Equity Page 17
Figure 5: Quick Ratio Page 18
Figure 6: Current Ratio Page 18
The Gap Case Analysis
In 1969, Donald and Doris Fisher opened a small store in 1969 whose goal was to cater to teenagers, selling primarily Levi¡¦s jeans. Cleverly named The Gap, after ¡§the generation gap,¡¨ the idea soon took off and within a year the Fisher¡¦s were operating six Gap stores in the area. Today, Gap Inc. is comprised of three divisions; Banana Republic, Gap, and Old Navy and is a leader in the specialty apparel market.
Gap Inc.¡¦s successes continued into the 1980¡¦s and 1990¡¦s through the acquisition of the Banana Republic clothing store chain and the introduction of GapKids, babyGap, GapBody, and Old Navy Stores. However, early in 2000, the Gap division made a doomed decision to alter their standard clothing offerings by introducing trendier clothing that neither appealed or sold to existing customers, nor attracted new ones. Also, overexpansion of stores resulting in lower sales in individual stores while operating costs increased. For two next two years Gap sales and stock value declined dramatically.
In 2002, the Gap division, with a strong brand name, high quality and fashion forward products was faced with the challenge of differentiating itself from its competitors in an extremely competitive market for the short...
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