project about GAP
Lucky0622
GAP.docxRequirement: This project will be finished by a group. This project is about GAP. I have marked the part that I need to write (Yellow words). You only need to finish this part I marked. You need to analysis the Strengths and weaknesses of Forever 21, and compare Forever 21 with GAP. About “Majority Market Share” part, you need to use the link below to analysis GAP’s market shares. There are two cases about GAP below, you also need to use it. In addition, you also need to find other sources to enrich paper, you need to find these sources from the Google.
Single space, 12 size font, 1.5 pages.
Project outline:
Overview of industry
· Boundaries
· Define industry
· Notable characteristics
· Structure
· Fast Fashion***
Strategic Groups in Industry
· Identify different groups
· Identify several companies within group
Gap
· Strategic Group?
· Strategic Group analysis
· Strengths and weaknesses
Competitors
· Strengths and weaknesses
· H & M
· Zara
· Forever 21
Majority Market Shares
· Concentrated companies
Business Models
· Identify business model of Gap
· Identify business model of competitors
· Identify strengths and weaknesses
· Identify similarities and differences
Future of Industry
· Opportunities
· Challenges
Link:
Case 1:
http://www.adweek.com/brand-marketing/gaps-biggest-problem-it-lost-its-brand-identity-165367/
The Gap’s Biggest Problem Is That It Lost Its Brand Identity
Once effortlessly cool, now everything—and nothing—to everyone
By Kristina Monllos|June 17, 2015
This week The Gap said it would close 175 of its stores in North America, or roughly a quarter of them, due to lackluster sales. The retailer also plans to cut 250 corporate jobs in San Francisco and New York. The brand, in other words, is floundering. What happened? And how can the once-dominant khakis-and-jeans chain get its mojo back?
Some culprits are obvious, like the prevalence of online shopping and the popularity of fast-casual competitors such as H&M and Forever 21 entering the market. (Other major North American retailers, like Abercrombie & Fitch and J. Crew, are hurting, too.) And analysts point out that Gap also hasn't established a real connection to millennial consumers.
But the biggest blow to the Gap brand, analysts say, is its murky brand identity. Gap used to represent "effortless cool." Now it has no clear position, and that's costing it market share.
"Gap was a leader and innovator in the '90s," said Ruth Bernstein, founder and chief strategic officer at YARD, a strategic image-making agency. "They single handedly reinvented the way retailers advertised through their entertaining khakis-swing-singing-dancing spots. Times have certainly changed, and the competition that once emulated them has overtaken their position."
Martin McNulty, CEO of the digital marketing agency Forward3D, agreed. "Gap has lost what it stands for today," he said. "In creating spin-off brands like Banana Republic and Old Navy, it did a great job of segmenting out-of-office wear and low-cost apparel. But the success of these brands seems to have come at the expense of the core Gap offering."
"Gap's TV strategy was legendary. It symbolized effortless cool—thanks to heavy celebrity association—but in the absence of this, the brand has been displaced by a slew of denim retailers," said McNulty. "Surf and street brands and discounters have all taken chunks out of the mass appeal that Gap once had."
'Dress Normal' didn't make a dent
Last year Gap hired Wieden + Kennedy's New York office to run its creative. The shop came up with the brand's current "Dress Normal," campaign, using celebrities like Elisabeth Moss and Anjelica Huston to tout the brand's new tagline. In a press release for the campaign, the brand said consumers needed to find their own versions of "Dress Normal" and that the campaign stood for "individualism and the liberation that comes from confidently being your most authentic self."
But even with big-name directors like David Fincher and Sofia Coppola, W+K's campaign hasn't seemed to make a significant dent in the brand's lagging sales numbers.
Differences between Generation X, which represents about 40 million people, and the millennial generation, which represent nearly 85 million people, have also played into Gap's woes, said Michelle Lynn, evp and managing director of the Dentsu Aegis Network.
"You want to play to the mass market," said Lynn. "But what we've seen [with millennials] is that this population of people is much more nuanced [than Generation X]. You have to go beyond those stereotypes to figure out what the insights are, what's important to these people that you can win with, and it's hard to win with 85 million people."
Analysts agreed that for Gap to win over its consumer base again, it needs to dig deep into what once made the brand successful—while keeping in mind that times and retail tactics have changed.
"They need to get their mojo back by resurrecting their innovator spirit," said Bernstein. "They were never about doing things 'normally,' but always about the American spirit of individuality, which made the brand so simply, brilliantly, strong."
Case 2:
https://www.nasdaq.com/article/what-are-the-problems-plaguing-gap-inc-cm669698
What Are The Problems Plaguing Gap Inc.?
August 24, 2016, 01:50:53 PM EDT By Trefis Team, Trefis
Shutterstock photo
While in the recent second quarter results Gap Inc ( GPS ) beat analysts' expectation on EPS and revenue, the results were still disappointing with over a 6% fall in EPS, a 24% decline in operating income, and a 43% drop in net income. The company also offered a downbeat outlook for the rest of the year, with a forecast of a full-year EPS to be in the $1.87 to $1.92 range, down significantly from its prior expectation of $2.20 to $2.25.
Gap- Q2 2016- 1
See our complete analysis for Gap Inc.
There are a number of issues the company has to deal with. Some of them have been highlighted below, and as will be seen, the first three problems are inter-related.
1. Pricing
One of the main problems the company has is the high initial prices it charges for its products. CEO Art Peck addressed this concern in May, when he stated the company was looking into the starting prices on its merchandise, with some changes being made across the Gap, Banana Republic, and Old Navy brands. However, this is a deep-seated problem, and one which cannot be solved overnight. According to Credit Suisse analyst Christian Buss , this would require a substantial overhaul of the supply chain, and would take years to fix.
2. Heavy Discounting
The company's pricing problem extends further than its initial prices: Gap's three main brands remain heavily discounted. As per research by Wells Fargo, during the second quarter to date, Gap and Banana Republic were more promotional than during the same period last year, while Old Navy was similarly promotional. In May, Peck did address this, and noted steps were being taken to curb such discounts. The competition from brands like H&M, which offer good quality clothing at lower prices, forces the company to offer discounts. However, if the starting price of the company is competitive, there will not be a need to furnish such heavy promotional activities.
3. Speed To Market
Fast fashion retailers, such as Zara, H&M, and Forever 21, are able to able to move styles from the runway to the stores within weeks, constantly evolving their assortment and keeping their products fresh. Historically, retailers placed their bets on fashion a year in advance, and since they marked their products higher, there was room for markdowns. However, now companies have realized that by cutting the time down to three to six months, they don't need to price the items higher. As under the previous CEO Glenn Murphy, Peck is also looking to speed up and improve to the supply chain, and claims significant progress has been made to accomplish this.
4. Traffic
While consumers are still willing to spend their money, there has been a fundamental shift in what they are choosing to buy. Shoppers are increasingly moving away from spending on apparel, towards more spending on experiences, such as vacations, eating out, or a concert. This is reflected in the reduced traffic to malls and stores, and record spending on air travels, 8% rise in restaurant sales in the first eleven months of 2015, and growth in expending on media, which includes video games and streaming services such as Netflix and Spotify. This mindset change is proving to be a tough environment for retailers. Many have been trying to overcome this by sprucing up their outlets. For example, Urban Outfitters has opened bars and restaurants within its stores, Barnes and Noble has in-store cafes, and a Target store features a Starbucks. Vacations and dining out are expected to get a major chunk of the spending in the future, with a recent Mintel study pointing out an expected 27% increase between the years 2015 and 2019.
