Analysis of the Firm`s Industry GAP Incorporation

Analysisof the Firm`s Industry:GAPIncorporation

Analysisof the Firm`s Industry:GAPIncorporation

GAPIncorporation is a California-basedmultinational companythat sellsclothingandotheraccessoriesthat wasfoundedin 1969. GAPoperatesin theretailindustryandithas about3,075 storesin variouspartsof theworld(GAP,2015). Mostof theGAPstoresarelocatedin theUnited Statesandothers in theUnited Kingdom, Spain, Netherlands, Japan, French Canada, Germany,andCanada. GAPhas six divisionsthat includeBanana Republican, Namesake banner,Piperlime, Old Navy, Athleta, andIntermix. Thispaperwill analyzetheretailindustryin which GAPoperates,with a focuson thekeyfactorsthat affectGAP.

The&nbspGAP’sgrowth is affected by four factors. Incorporation.First,competitionis one of thefactorsaffectingallplayersin theretailindustry.Clothingstoresarenot exemptedfrom thestiffcompetition.In thecaseof GAP,there are morethan a hundred largeretailshopsthat dealwith clothingin thesamemarketsegmentsthat GAPoperatesin.Someof thecompaniescausingdirectcompetitionto GAPincludeANN, Inc, Ascena Retail Group, Cato Corporation, Abercrombie,andFitch, among others (NASDAQ, 2015). Thestiffcompetitionis likelyto limitthegrowthandprofitability of GAPin theshort-andinthelong-run.

Secondly,technology has affectednearlyallaspectsof humanlifeandbusiness.In thecaseof theretailindustry,technological advancesare changingthewayin which retailfirms are conductingtheir operations.Currently, theworldis goingdigital, which makesonline marketinga keydeterminant of thesuccessin theretailindustry(Richards, 2014). In addition,thesocialmediahas gainedpopularityandprovidesa platformon which retailplayerscan socialize with potentialcustomers.Failureto adoptthenewtechnologies will reducethecompetitiveadvantageof GAP,which will in turnreduceits marketshare.

Third,changein customerbehavioris a factorthat retailfirms cannot ignore.Retailfirmsthat sellclothingproductsshould considera widerangeof factors(includingchangesin lifestyle, norms,population,anddemographic) whendeterminingthestylesandfashionsthat will appealto thetargetconsumers.Studyalsoshowsthatconsumers’expectations about theshoppingexperienceandqualityare rising(Richards, 2014). ThismeansthatGap should ensurethatits storesare designedandarrangedin a waythat attractscustomers.In addition,theclothingstocked in its storesshould be consistentwith currentfashiontrends.Failureto accommodatechangesin customerbehaviormight subjectGap to theriskof losingits marketshareandprofitability.

Fourth,theformationof economicintegrationis affectingallbusiness,includingtheretailindustry.Forexample,theformationof theNorth America Free Trade Agreement enlargedthemarketforthe retailindustrysince playersin thisindustrycan operatein anyof themembercountries.However,there are someeconomicintegrations(suchas Trans-Pacific Partnership) are a threatto theU.S. clothingretailers since somemembercountries(suchas Vietnam) havethecapacityto sellcheap,butqualityproducts.Therefore,economicintegrationwill affectGAPin negativeandpositiveways.

Inconclusion,GAPIncorporation is a retailcompanythat sellsclothingin differentcountries.Thesuccessof GAPin theretailindustryis affectedby differentfactors.Thestiffcompetitionin theindustryis likelyto reducetheGAP’sprofitability. Technological advances(suchas online marketing)haveprovideda newplatformon which retailers can compete.In addition,retailers should adjusttheir operationsin orderto addresschallengesassociatedwith changesin consumerbehavior.GAPshould takeadvantageof theopportunitiesprovidedby economicintegrationsandaddresschallenges(suchas competition)associatedwith suchintegrations.

References

GAP(2015). A dress for every to-do. GAP.Retrieved March 20, 2015, from http://www.gap.com/

NASDAQ(2015). GAP, Inc: The competitors. NASDAQ.Retrieved March 20, 2015, fromhttp://www.nasdaq.com/symbol/gps/competitors

Richards,D. (2014). The impact of technology on the future of retail.Computer-Work.Retrieved March 20, 2015, fromhttp://www.computerworlduk.com/blogs/si-and-tech-insights/the-impact-of-technology-on-the-future-of-retail-3568012/