gap inc

Download GAP Inc

Post on 29-Aug-2014

13 views

Category:

Documents

2 download

Embed Size (px)

TRANSCRIPT

GAP Inc. Strategic Audit

1

GAPs Inc. Strategic AuditPresented To: Dr. Saneya AL Galaly

Presented By:Nevine Roushdy: (External Environment & Internal Environment Analysis) Rania Habib: (Analysis of Strategic Factors & Strategic alternatives) Dina Sameh: (Implementation and Evaluation & Control) Amr Negeda: (Current Situation & Corporate Governance)

GAP Inc. Strategic Audit

2

Abstract This paper is a strategic audit of Gap, Incorporated and its portfolio members. It describes the birth of the company and goes on to describe its current position. As part of the d e s c r i p t i o n p r o c e s s , i t i n c l u d e s t h e f o u r m a j o r b r a n d s t h a t a r e p a r t o f G a p , I n c . T h e s e brands include Gap, Banana Republic, Old Navy and Piperlime. A Managerial Analysis is included herewith that gives an insight into SWOT analysis and Porters Five Forces Analysis of the company, and also included is the Strategic Distinction of the company. As per the Financial Analysis part, financial tools such as ratio analysis, consolidated financial statement comparison, and stock trend are analyzed to assess the companys progress. The paper also keeps close track of companys social, ethical, environmental and managerial aspects in day to day operations. F u t u r e expectations and possib le diversification or anti-

d i v e r s i f i c a t i o n p r o c e s s t h a t t h e corporation can practice are also part of the paper. As a conclusion, the paper sums up ideas from a group of four undergraduate students and incorporates them to breakdown the strategic and financial aspect of Gap, Inc.

GAP Inc. Strategic Audit

3

Contents 1. Current Situation. ........................................................................................................... 5 A. Current Performance (ROI. MS, Profitability) .................................................................. 6 B. Strategic Posture. (Mission. Obj., Strategies, Policies) ................................................... 16 2. Corporate Governance. ................................................................................................. 22 A. Board of Directors. ....................................................................................................... 22 B. Top Management. ........................................................................................................ 34 3.External Environment: Opportunities and Threats (SWOT) ................................................ 38 A. Sustainability Issues. B. Societal Environment.... 1.Economical Analysis 2. Political Analysis 3. Technological Analysis. ............................................................................................ 44 4. Socioculturall Analysis. ............................................................................................ 46 C. Task Environment .. 1. Threat of new entrance.. 2. Bargaining power of buyers.. 3. Threat of Substitute products. 4. Bargaining power of supplier.. 5. Rivalry among competing firms. C. External Factors Analysis Summary (EFAS). ................................................................... 65 4. Internal Environment: Strengths and Weaknesses (SWOT) ............................................ 67 A. Corporate Structure. ..................................................................................................... 67 B. Corporate Culture. ........................................................................................................ 68 C. Corporate resources...................................................................................................... 71 D. Internal Factors Analysis Summary (IFAS). ................................................................... 92 5. Analysis of strategic Factors (SWOT). ............................................................................ 93A. Situational Analysis. ...................................................................................................... 98

B. Review of Mission and Objectives. ................................................................................ 99

GAP Inc. Strategic Audit6.

4

Strategic Alternatives and Recommended Strategy. .................................................... 103

A. Strategic Alternatives .................................................................................................. 103

B. Recommended Strategy .............................................................................................. 106 7. 8. Implementation.......................................................................................................... 107 Evaluation and Control ............................................................................................... 107

A. Output controls .......................................................................................................... 107

B. Input controls ............................................................................................................. 107 C. Behavior controls ........................................................................................................ 107 D. Risk Management ....................................................................................................... 107 List of Figures: Figure 1 Organization Chart for GAP Inc .......................................... Error! Bookmark not defined. Figure 4 Organization Chart for GAP International ......................... Error! Bookmark not defined. Figure 5: SWOT Analysis for GAP Inc ............................................... Error! Bookmark not defined. List of Tables: Table 1: Comprehensive Income Statements .. ........................................................................... 7 Table 2: Balance Sheets . ................................................................................................................ 9 Table 3: Cash Flows...5 Table 4: Financial Analysis Ratios ................................................................................................. 79 Table 5 EFAS table for Gap Inc. 65 Table 6: IFAS table for GAP Inc. ..32 Table 7: SFAS Matrix for GAP Inc .................................................................................................. 98 Table 8: TOWS Matrix for GAP Inc .............................................................................................. 103

GAP Inc. Strategic Audit Introduction

5

Gap Inc. is a leading international clothing retailer offering attire, accessories and personal care products for men, women, children and babies. The company represented one of the most impressive success stories in the history of the U.S. retail business. It is an American clothing and accessories retailer based in San Francisco, California, and founded in 1969 by Donald G. Fisher and Doris F. Fisher. The company has five primary brands: the namesake Gap banner, Banana Republic, Old Navy, Piperlime and Athleta. As of September 2011, Gap, Inc. has approximately 135,000 employees and operates 3,076 stores worldwide, of which 2,551 are in the United States. Gap, Inc. remains the largest specialty apparel retailer in the U.S., though it has recently been surpassed by the Spanish-based Inditex Group as the world's largest apparel retailer. Despite the company's publicly traded status, the Fisher family remains deeply involved in Gap, Inc.'s business and collectively own a significant quantity of the company's 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. Fisher's wife and their son, Robert J. Fisher, also serve on Gap's board of directors. I created Gap with a simple idea: to make it easier to find a pair of jeans. We remain committed to that basic principle. Don Fisher, Gap Inc. Founder and Chairman. Gap.com says, We try to put out affordable, casual designs of shirts and jeans while providing value to the shareholders and making a positive impact in the community.

GAP Inc. Strategic Audit I. Current Situation.A. Current Performance Return on Investment:

6

Market Share: Specialty retailer Gap, Inc. (GPS: News ) announced Thursday plans to boost its market share in the $1.4 trillion global apparel market over the next three to five years. Shifting marketing dollars to woo new customers, particularly younger ones, as well as African-, Asian- and Hispanic-Americans, where in all cases, Gap's market share is too low. In the past, we didn't put enough money into acquiring new customers, Murphy said during his presentation at the Bank of America Merrill Lynch 2011 Consumer Conference. Maximizing the pipeline, which the ceo said is faster after being overhauled last year. He cited a huge opportunityto fill in with trend-right product and chase products that make sense to usand focus on new category development, which have been shortfalls. At Old Navy, he said, jewelry will become a significant category.

GAP Inc. Strategic AuditProfitability: Financial Statements and Analysis Table 1: Income StatementsCurrency in Millions of US DollarsRevenues total revenues cost of goods sold gross profit selling general & admin expenses, total depreciation & amortization, total other operating expenses, total operating income interest expense interest and investment income net interest expense currency exchange gains (loss) other non-operating income (expenses) ebt, excluding unusual items other unusual items, total ebt, including unusual items income tax expense earnings from continuing operations net income net income to common including extra items net income to common excluding extra items Jan 31 2009 Reclassified Jan 30

Recommended

View more >