Case 11 Gap, Inc.
Dickinson State University
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 States, 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.
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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 Ratios
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...