SWOT Analysis of GAP Inc.
SWOT analysis of GAP is an effective method that the company applies in determining its ability to survive in the market, while also growing revenue base. GAP Inc. is a leading world-wide retailer that deals in clothing, accessories and personal care products for the whole family. It operates six globally recognized brands including, Old Navy, Banana Republic, Gap, Intermix, Athleta and Piperlime. GAP has several more than 3,200 stores across the world and also operates an e-commerce website from where customers can get products information and do their shopping.
What is SWOT Analysis of GAP Inc?
A SWOT analysis of GAP Inc. basically explores the strengths, weaknesses, opportunities and threats of the clothing giant, with regards to the global market which targets. By determining the company’s strengths and opportunities, the management will be able to come up with measures on where emphasis is required for continued success.
The weaknesses and threats of a business are indicators of failure and by knowing them, the company can easily make decisions and plans for eliminating mistakes and avoiding losses in the future. The following is a comprehensive SWOT analysis of GAP Inc.
With the six brands that it operates globally, GAP has been able to attain a strong product portfolio and brand recognition. Coupled with its wide range of products that target the whole family, GAP Inc. enjoys global customer recognition and loyalty.
Its’ presence over a wider geographical area is also another strength that has made several people across the globe to identify with the company’s products.
Because of the global reach of GAP Inc. the business is able to record a high inventory turnover ratio. In fact, this is one of the main reasons the company commands a strong financial position in the market.
GAP Inc’s dedicated section for baby products is also another feature that has kept the business afloat since such products are always in demand even when the market is not doing well.
Despite the global customer base that GAP Inc. has, the company heavily relies on vendors from outside to sell its products. This is an area of weakness since such vendors are susceptible to various kinds of mistakes that may hinder the successful operations of the company.
The high competition in the apparel and accessories industry is also another point of weakness since it implies many customers are learning of new brands that could shift their buying trends. Besides, it also limits the market share of the company.
GAP has not fully focused onto penetrating the emerging economy markets and this has limited its ability for expansion and revenue growth.
One of the opportunities that GAP Inc. can exploit is the emerging markets in Asia and Europe. These markets present an ideal platform for expansion and profitability.
The growing use of technology in business is also another opportunity. Through effective online campaigns and shopping, the company can easily attract new customers for its products and brands across the globe.
Considering the good performance of GAP Inc. in operating six major brands is proof that it can still form franchise units and joint ventures with other companies in the industry for greater development.
The readily available market for kids’ apparel and products is also another opportunity that the company can fully explore for maximum profits.
The clothing and accessories market is experiencing a very stiff completion between various brands, offering more fashionable products at better prices than GAP Inc.
The rapid change in fashion trends is also another threat that the company has to plan on how to handle.
Counterfeits is yet another issue that is threatening the existence and success of businesses today.
Another threat is the increased production and operational costs, which could water down profits.
Conclusion on SWOT Analysis of GAP Inc.
According to this SWOT analysis of GAP Inc., the company is strong enough to withstand market forces considering its wide selection of products and brand portfolio, which have ensured global recognition, loyalty and financial power. However, it still needs to focus on international expansion into the emerging economies and intensifying its online presence. Besides, GAP Inc. also needs to consider the shifting fashion trends in order to meet customer needs.
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