Gap Inc. Brand Strategy

I. Executive summary

Gap Inc. is a global apparel retailer that offers apparel, accessories, and personal care products for men, women and children under the brands Gap, Baby Gap, Banana Republic, Old Navy, Athleta, Intermix and Weddington Way. Gap started in San Francisco, California, USA in 1969 by a couple named Donald and Doris Fisher; with one store opened by Doris and Don Fisher and is one of the largest specialty apparel retailers with 3,721 company owned stores in the United States, Canada, the United Kingdom, France, Ireland, Japan, Italy, China, Hong Kong, Taiwan, and Mexico. Gap Inc. has franchise agreements with unaffiliated franchisees to operate Gap, Banana Republic, and Old Navy stores in Asia, Australia, Europe, Latin America, the Middle East, and Africa. Under these agreements, third parties operate stores that sell clothing and accessories using Gap Inc. brand names. Products are also available online through company-owned websites which partners with third parties that provide logistics and fulfillment services. Most of the products sold under Gap Inc. brand names are designed by Gap Inc. and manufactured by independent sources. Gap Inc. also sell products that are designed and manufactured by branded third parties through their Intermix brand. The company has 140,000 employees worldwide.

Gap Inc. uses product differentiation for all five brands within its portfolio offering fashion compared to premium fashion brands such as Abercrombie & Fitch and JCrew. Gap Inc.’s competitive advantage are a portfolio of distinct brands across multiple channels, global brand recognition, and strategic relationships with its suppliers.

Gap Inc.’s business weaknesses are declining trends in sales revenue and profits, failure to utilize online sales channels in an efficient manner, and dependency on external manufacturers.

The company has been struggling with declining sales and profits during the last two years. Net sales for 2015 decreased 4 percent to USD 15.8 billion compared with USD 16.4 billion for 2014. Gross profit for 2015 was USD 5.7 billion compared with USD 6.3 billion for 2014 (Annual Report, 2015). Art Peck step into the role of Gap Inc.’s CEO in February 2014 and has launch several initiatives to improve business profitability including closing down several brick and mortar locations in the United States, utilizing third party online retailers like Amazon, and expanding outlets in international markets.

II. COMET analysis

Consumer preference

Gap scores high with consumer preferences particularly with high quality because of their global availability, acceptance, and success. With their global presence and backing of American quality apparel, they do have a premium brand recognition internationally (although considered a mass/premium brand