The Gap Inc.

1. Analysis of the company's history, development and growth

Founded in 1969 by Donald Fisher and Doris Fisher, Gap Inc is largest clothing and accessories retailer in America. The clothing store began in San Francisco California, where the Fishers opened their first shop because they had been frustrated with the poor service and clothing styles offered at other retailers. The store was named the gap because it supplied clothing to teenagers and college students, the "generation gap" between children and adults.

Originally, Gap did not sell its own brand of clothing, carrying only the Levi Strauss & Co label on its shelves until 1978. At this time Gap had opened more than 300 stores and was selling its own, increasingly popular brand with the Gap label. While manufacturing products under its own label Gap saw its dominance begin, and ultimately stopped selling Levi's altogether in 1992; this move allowed Gap to lower transaction costs and reduce supply threats created by Levi's.

For years, Gap was popular for its basic T-shirts, khakis and sweaters, bringing in the kind of cash-generating revenue that helped fuel its explosive growth in the 1990s.

But as competitors began offering similar styles and prices and apparel sales began to lose momentum, Gap slipped away from basics and tried to pull ahead with unique fashions. The strategy backfired, and the Gap subsequently alienated its core 20- to 30-year-old customer base with far-out fashions that appeal to younger consumers, or that missed completely. Gap chose to chase trends, instead of reinforcing its strengths.

2. Identify the company's internal strengths and weaknesses

Strengths

Branding

The Gap's multiple brands have become some of the most recognizable labels ...

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...d affiliations. Currently the brand stands for nothing. They should focus on what the brands stands for rather that any popular trend. Due in part to its commercials, in the early 90's the Gap was perceived as being cool and understated. If they could find a way to use its reach to influence culture in turn restoring its credibility among young consumers. At the end of the day it is the product that really matters, by changing the product line to reflect the original Gap ideals, the company will be one step closer to survival.

References

Textbook, Strategic Management: An Integrated Approach

Case 13, Gap international: A specialty Apparel Retailer C200-229

Wikipedia Online-The Gap

"Gap hires Egon Zehnder to find new CEO" (reprint), Associated Press, 5 Mar 2007.

"Gap Explores Alternatives, Including Possible Sale: CNBC's Faber", CNBC.com, 8 Jan 2007.