GAP: SWOT analysis

Introduction GAP Incorporated is a clothing and accessories company based in San Francisco California. The firm operates is various markers worldwide. It has a retail chain of more than 3,130 stores in different global locations. At present, GAP employs more than 150,000 personnel. In 2005, the company recorded an increase in earnings which reached $16 billion. It is undeniable that GAP will continue to expand and penetrate other markets. GAP has a wide array of products that suites the preference of consumers.

GAP has an established reputation as producer of top notch clothing and accessories (GAP, 2007).

2. SWOT Analysis The strength of a firm shows the aspects where it attributes success (McGahan, 2004). The company has one of the most diverse clothing and accessories in the industry. GAP values the uniqueness and flexibility of its products. It aims to target different market segments without losing its identity. The company also has a planned scheme to advertise its products. There were several billboards of GAP products in MLB stadiums.

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This is one method to introduce the products of the company in the mainstream. GAP prides on its affordable products. The pricing strategy is focused of the middle earning market. The weaknesses of the company are the internal aspects that affect the delivery of its products (Hussey, 1999). The main culprit for its failure is the lack of clear message that the promotional strategy attempts to convey. In addition, GAP only spends for online advertising at a minimum level. It was revealed that only 2% of the total budget for advertising is allocated for online promotions.

In addition, GAP has been a subject of controversy regarding its labor practices. The company has been sued for manifesting unfair labor standards. These complaints have been recorded from various store locations in the world. Opportunities in the market present viable outlets for growth (Porter, 1980). The presence of emerging markets is one of the main future sources of revenue for the company. China is gaining ground and other Asian markets are moving at a fast pace. This is important because eventually, GAP has to channel its operations outside the developed markets.

The development of online retail is another possibility for GAP. The firm can save by using the Internet as the medium for selling. Finally, the threats serve as the external aspects that detriment the future plans of the firm (Porter, 1980). The company has been accused of using designs that were already used by other companies. These problems tend to take time before being resolved. In addition, the costs associated with such predicaments are high. Further, piracy is another major threat to the company.

There are several knock off GAP merchandises that are distributed in the market. Unfortunately, the company is powerless to solve this problem. Conclusion GAP continues to succeed because it has already established a strong pedigree in the industry. It has a defined target market where most of its designs are based. In addition, GAP is known to provide sophisticated products without the high price. But there are still areas where improvements have to be made. These pertain to online advertising and penetration in emerging markets.

References

Hussey, R. , (1999), A Dictionary of Accounting, “SWOT analysis,” Oxford: Oxford University Press. McGahan, A. , (2004), How Industries Evolve – Principles of Achieving and Sustaining Superior Performance, Boston: Harvard Business School Press. Porter, M. (1980), Competitive Advantage: Techniques for Analyzing Industries and Competitors, New York: Free Press. GAP Incorporated, (2007), About GAP Inc. , Date accessed: 17 November 2007, from: <http://www. gapinc. com/public/index. shtml>