GAP SWOT Analysis – SWOT Analysis of GAP: Doris, as well as Don Fisher, opened the first GAP store in 1969 with the intention to help shoppers to locate jeans. In the course of time, GAP has changed the definition of American fashion, and the way clothes are produced and sold.
It’s been 49 years since the company has expanded from one store to a global company with five brands: Gap, Intermix, Banana Republic, Athleta, and Old Navy which has stores across 43 countries. In August 2018, there were 3187 store locations that are owned by the company, which include The US, Canada, Europe as well as Asia. The GAP items are available in around the world in 90 countries via 439 franchised locations around the globe. The GAP brand has taken the iconic American fashion that was a staple and the streets of San Francisco around the world.
GAP fun facts: GAP store became synonymous with American classics, like blue jeans and T-shirts.
About GAP – SWOT analysis of GAP
Company: The Gap, Inc.
CEO: Sonia Syngal
Founder: Donald Fisher | Doris F. Fisher
Year founded: 21 August 1969, San Francisco, California, US
Headquarters: San Francisco, California, United States
Annual Revenue: US$13.8 Billion
Profit | Net income: US$4.4 Billion
Number of employees: 135,000
Products & Services: Clothing | Accessories | Personal care products
SWOT analysis of GAP – GAP SWOT analysis
SWOT Analysis Of GAP is brand-based. SWOT Analysis of GAP evaluates the brand’s strengths, weaknesses, opportunities, and threats. Advantages and disadvantages can be attributed to internal factors while opportunities and threats can be attributed to external factors. We will be discussing GAP’s SWOT Analysis. Below is the detailed SWOT Analysis of GAP.
Let’s talk about GAP’s SWOT assessment.
Strengths of GAP – GAP SWOT analysis
- World Reputation for Brands and Multibrand Portfolio:
The brand operates company-owned or franchised stores that operate across 43 countries. It also can deliver online orders to more than 90 countries and regions. It is a well-known brand with more than 135,000 employees across the globe. The brand is able to meet customers’ requirements and desires all across international boundaries.
Gap Inc.’s portfolio comprises brands such as Gap Global, Old Navy Global, Banana Republic Global, Athleta, and Intermix. Gap’s Banana Republic Global segment offers clothes, eyewear, jewelry as well as other items. Athleta provides women’s fitness apparel under the Gap brand. We offer GapKids, GapMaternity, GapFit, and more. Each of these brands focuses on various segments of the market.
- Diversity and equality within the branding
The principle of equality has been at the heart of the company and these values have been infused into the company’s culture from the very beginning. The company makes sure that people from all backgrounds feel comfortable at the counter and at work.
In Thomson Reuter’s diversity and inclusive index, Gap Inc. ranks among the top five. Gap believes that inclusiveness diversity, diversity, and the possibility are key to increasing growth, keeping employees, and drawing new customers. In 2016, Gap Inc. was awarded the 2016 Catalyst Award for leadership on equal pay for equal work as well as a strong gender representation. This inclusion has contributed to creating an image that is positive and has created a trust for Gap Inc.
- The most effective chain of supply chain
In the case of supplying chain, it is focused on speed and flexibility, it utilizes techniques like the fabric-based platforming technique or positioning method that utilizes the same fabric in different styles that can be used for different seasons. Gap Inc. also uses the concept of just-in-time to produce its products, with one-third of its merchandise being made within a quarter, instead of the nine months that it was previously taking the previous nine months. It also has a more efficient inventory system.
- Sustainable Business
The jeans purchased by a customer from Gap are manufactured using 20 percent less water than a traditional manufacturing process, thereby saving 65 million liters of water every year. In 2021, the company promises that the clothes purchased by customers at Gap are more sustainably-sourced. Athleta also states that by 2020, the majority of Athleta’s products are made from sustainable sources.
By 2020 1 million women from communities and factories will graduate from the P.A.C.E. program. Gap Inc. also plans to reduce greenhouse gas emissions generated by its globally owned and operated facility by 50 percent in 2020. In all its efforts to achieve sustainability, the company is tackling the future with a sense of creativity, vision, and an unwavering sense of purpose.
Weaknesses of GAP – SWOT Analysis Of GAP
- Brand popularity decreasing:
The brand image of Gap is getting less popular and requires an improved understanding of what it is doing. Because of its poor sales, Gap has shut down a lot of stores across the world. The gap was once a symbol of “effortlessly stylish” however now it’s not able to make itself known as a brand that appeals to younger generations, and this is hurting its sales.
A unisex pair from Gap costs $69 while similar-looking pair in Old Navy (with little polyester added) is $25. The popularity in success of Old Navy has come at the cost of Gap
- Increased Competition:
Brands such as H&M, Forever21, and Zara are always improving their products and putting together a more customer-centric collection. They are all gaining traction in the marketplace is expanding, however, the gap appears to be settling. The increasing popularity of online shopping and the increasing popularity of the fast-casual segment has profoundly affected sales for the brand. There is fierce competition in the fashion sector and consumers are prone to changing brands. The gap has to improve its product offerings and create collections that will appeal to the young generation of consumers.
- A limited product range:
When people walk into a Gap shop, the only thing they’ll see is an array of V-neck tees and sweaters, as well as a plethora of jeans. The gap is a brand that sells things that are simple but important and this method may have worked in the past, but today customers are looking for more. They are looking for something new. The same simple, not too flashy reliable style is re-used every year, and it’s getting dull. H&M, Forever21, offers similar items at a cheaper cost. They attempted to promote their essential image through the launch of a new campaign called “Dree Normal” however when the collection launched in stores it wasn’t a huge success. The clothes were not interesting enough to attract any attention. Gap has to revise its offerings in order to create designs that are more in tune with the generation of millennials.
Opportunities of GAP – GAP SWOT analysis
International growth of the market with a focus on Asia:
The Philippines is a great fit for Old Navy’s products since they share a strong connection to American Brands. Although the market is small in size, however, the middle class of the Philippines is growing and offers great prospects for retailers that focus on value.
Japanese consumers are more inclined to purchase durable, value-oriented products, and the demand for cheap clothing is expanding therefore expanding is a good idea. For China, Old Navy is among the most sought-after Western brand that is affordable. These are new markets that have the potential to grow for purchasing If Gap can effectively reach the right buyers and grow in this Asian Market.
- Enhancement in online commerce:
Gap Inc. has worked well to establish its name in the online world. It has a single platform to market every product line from different brands. This has helped to increase the visibility of other brands. The gap has been able to grow significantly from its online and mobile space. In the first quarter of 2018, the company surpassed its goal of $3 billion in online revenues.
The company has invested heavily in native mobile apps and improved the speed of the website. They also have the program Gap cash where users can avail additional savings and promotions and offers. Gap has the capability to deliver online items to more than 90 countries. Gap has introduced a new program that allows customers to shop online and then pick up in stores and store the products for seven days. The company should concentrate to make online shopping seamless for customers, which can help them stay loyal.
- Celebrity Endorsement:
In 2016, Gap used Olivia Palermo who is a world-renowned fashion icon. She was named the first female style ambassador. This improved the public visibility of the brand and also improve its image of Gap as a brand. Her Gap-branded attire at the 2017 CDFA Awards in New York helped to keep a larger following of celebrities to endorse. In the year 2017, Gap announced it was making a movie with famous celebrities such as Wiz Khalifa, Priyanka Chopra, and others. This type of program creates new opportunities in the near future and establishes Gap as a dynamic business. Studies show that celebrity endorsement of the brand can boost its expansion, improve visibility, and draw the attention of younger audiences.
- It is the most popular Gap Athleta label:
As per a Forbes Forbes report, activewear is the most important factor driving growth in the clothing sector. According to Global Industry Analysts Inc., Global Industry Analysts Inc. Sports and fitness clothing is expected to reach $231.7 billion in the world in 2024Athleta is doing very well and at a much higher than the market. It is close to opening several stores and is quickly growing in popularity. Its social media profile of the brand is very good and it is taking steps to encourage women across the globe. Gap Inc. has also created its own innovative center, which is working on technological fabrication and sustainability innovations for activewear. With initiatives like this. Gap Inc. is very confident about the brand.
Threats of GAP – SWOT analysis of GAP
- The decrease in profits and sales:
Gap brand recently revealed that sales of its stores fell by 5%. The brand has been increasingly dependent heavily on Old Navy and Athleta brands and is working to revitalize the Gap brand. The delayed deliveries caused the inventory to grow during the first quarter of 2018, which prompted retailers to turn to discounts. The brand isn’t able to meet its obligations even at a time when spending by consumers is growing.
The presence of physical stores has proven to be a problem for the brand, as sales have decreased and, consequently, affecting margins. The speed of change and a well-defined approach is necessary to revive the brand.
- Management is ineffective to make improvements in the business
The brand has made enhancements to its supply chain and is launching initiatives such as loyalty programs that are able to be utilized across different brands. Massive investments have been made in technology that helps employees replenish stock, etc. Old Navy has also announced that it will be adding sizes plus to draw new customers. Old Navy is unable to earn a profit even though the spending of customers is growing. The brand is not able to bring new and innovative designs on shelves and does not have a viable operating model.
Gap has struggled for a way to boost its performance due to the intense competition from low-end fast fashion clothing and the more expensive fine apparel brands. Brands such as Zara, H&M, and Forever21 are the major competition for Gap. They are able to continuously increase their store traffic and increase the turnover of their inventory.
The gap is taking steps to revitalize, but the effects are not evident and it is constantly losing customers. The company has initiated an overhaul program that focuses on creating the flexibility and efficiency of a business model. The company is in difficult times and has to rebuild its brand’s image.
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Overview Template of GAP SWOT analysis
We concluded that GAP is the world’s largest retail fashion company after conducting a thorough analysis of GAP’s swot analysis.
GAP faces many challenges, including brand switching, shifting fashion trends, competition, rising costs, and a limited global presence.
GAP should be endorsed by celebrities, expand into new markets and conduct online promotions to address these issues.
This is the SWOT analysis of GAP. Please let us know if you have additional suggestions to add.
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