OPERATION MANAGEMENT

Gap Inc



Gap Inc

Gap Inc.

GAP is an American clothing and accessories retailer founded in 1969. It is currently the largest specialty apparel retailer in the United States, and the second largest in the world. The company is differentiated into five different brands. Its banner store, GAP, appeals to a wide demographic, selling clothes and accessories for men, women, and children. Banana Republic was purchased in 1983 and is now branded as an upscale retailer. Old Navy is Gap's attempt to corner the cost leader segment of the market (Russell, & Taylor-Iii, 2008). Piperlime, created in 2006, is Gap's main foray into the world of online retailing, and Athleta, added in 2009, specializes in women's athletic wear.

The Fisher family remains deeply involved in the company, collectively owning much of its stock. Donald Fisher served as Chairman of the Board until 2004, playing a role in the ouster of then-CEO Millard Drexler in 2002, and remained on the board until his death on September 27, 2009 (Ansett, 2007, pp.295-303).

Business Profile

Recently, Gap has begun to focus on the role international markets will have in its future growth potential. By the end of fiscal year 2013, Gap plans to close 200 Gap stores in North America, which is a cut of almost 20%. They are countering this decrease in the flagship store with an increase in its market diversification, increasing the number of Athleta stores from 10 to 50 by the end of 2013. This will coincide with an expanding of the online brand Piperlime to include men's apparel, and a possible physical store in the near future. Gap reported a 16% growth in retail sales outside of North America, and to take advantage of this emerging market will follow a strategy of entering a market with a flagship store to build brand recognition, and then introduce smaller stores into surrounding areas (Marston, & Modarres, 2002, pp.83-99).

Evaluating the Operational Strategy for Gap Inc

It is clear in the market that as an organization Gap is struggling. Profitability, changing customer needs and tastes and increased global competition has affected our performance. The Gap North America division for instance, has not posted an annual increase in sales at stores open at least a year since 2004. In 2009, sales were $3.82 billion, down almost one-third from where they were in 2004 (Russell, & Taylor-Iii, 2008). At least four changes at CEO level have occurred, and as the new CEO, the need to determine and implement an effective operational strategy is of paramount importance.

The objective of this presentation is to obtain board approval on the proposed Operational Strategy for Gap and any possible changes to the recommendations and conclusions drawn by the executive team. The methodology adopted involved reviewing the entire business operations of Gap and that of its leading competitors (especially Zara). This involved using secondary data from the case study, internet searches on trends and developments in the global fashion industry and that of the company.

Market Environment and Management

Based on the moves that Gap ...