Gap Inc. is a retailer located at America at San Francisco that deals with clothing and accessories. It was founded in year 1969. It is one of the world largest giant's dealers in the apparel retailers. It has more than 3000 stores and branches in the united state, Canada, Britain France, Ireland and Japan. In 2009, it registered fiscal revenue of 14.2 billion dollars. This shows how it operates at great budget and has high revenue. Therefore, the profit margin is also high. The most apparel brand in the word that it operates is five and consists of Piperlime, Antheta, Old Navy, Gap and Banana Republic.
Executive summary
The apparel industry consists of the lifestyle and is much saturated in the provision of the clothing and the accessories. Completion is high and, therefore, the Gap Inc had the strategy to target new markets. It has established new physical store locations that improved the margin from other businesses in the industry. This has enhanced its brand image. It has also had many branches stores outside United State that consist of more than 300. This gives Gap Inc. aplenty room of expansion hence growth globally because it is well known. The feasibility of development of the Gap Inc and the business proposal evaluation shows great opportunities at the China market. This has been made possible through analysis of the company's environment at the capacity of the internal and external levels in the business.
The China resident has welcomed the Gap Inc whereby they have strongly supported the feasibility of the business. This has been manifested on the both retail sales and spending power of the Chinese residents. This has made the company expand in china. The Gap Inc. study shows the suitability and good performance in the China market. This is in consideration and comparison with other Asian countries business.
SWOT analysis
The Gap Inc.'s strength is from the global presence and huge profit margin from the market in United States. The presence of the e-commerce is another contributing factor in the strength of the business. In additional, the wide geographic has reduced it from the risk of a narrow market and a single economy. This has helped in the creation of brand image and, therefore, maintaining the strong the highest position in the global market.
The Gap Inc.'s weakness is mostly in the recall, in their products. This makes the business have negative publicity to their customers on their products and at the entire business. This has also affected and prevents commercialization of the potential products in the market entry. The Gap's opportunities come from the developing countries overseas. The business of the developing countries is growing at high rate thus the company has taken that advantage. The next opportunity is from the branding for the online merchandise. This is selling of the apparel products such as footwear and accessories, for men, ladies and children through online stores and retails.
Threats of Gap Inc. are from the economics recession in the world market at large. This is as a result of the raising prices of the raw materials such as cotton. This is affecting the profit margin and paving way of the counterfeit products in the market. The second threat is the changing of the customer's behavior that is unpredictable due to the recession. This makes the customers cut on the spending thus reducing the discretionary shopping.
The business ratiosLiquidity ratio
The current ratio assesses an ability to pay obligations in the short term of the business. It is also referred to as cash asset ratio. It is calculated by dividing all the current assets by all current liabilities. This ratio shows whether the company is in the capacity of clearing the debt in the short term. Under leverage ratio, there is debt ratio and the long term debt. The debt ratio is used to measure the leverage by dividing the total liabilities by the stock holder's equity.
In the long term debt, the loans and other financial obligations they are of long time lasting over one year. In activity ratio, asset turnover ratio measures the amount of the sales generated for every dollar's worth assets. Profitability ratio, the gross profit margin assesses the firm's financial wellbeing and health by revealing the amount of the money left over from revenues. This is after the account for the cost of the goods sold over.
Recommendation
The company is recommended to introduce large products that attract the different kinds of the customers. This is through enhancing the recognition of the products in the market. Example of this is getting to the business with the great-fitting pants and nursery gears for mothers and babies. Chinese has been the hub of the marketing in the apparel products. This is on the style of the fashions that depends on the color and the symbols.
The place of the marketing should be of thigh population. Then the Gap Inc. is supposed to open the stores in the cities that have a huge number of the customer both potential and the current. Examples of these cities in China are Shanghai, Beijing and Guangzhou of which their resident have high disposable income. On the promotion media advertisement helps in raising the brand awareness to a large number. This motivates them to purchase the accessories and apparels. In increasing popularity, celebrity endorsement plays a great function in attracting the customers.
