Gap Inc: SWOT analysis

The Gap Inc was founded in 1969 by Doris Fisher and Donald Fisher. Gap Inc is the largest outlet for clothing and other accessories in America. This store was started in San Francisco California. Fishers decided to open their shop due to frustrations they encountered from poor services and styles of clothing from other retailers. Initially, Gap was not only selling its own brands of clothing but it also incorporated other popular brands, such as Levi, but stopped later due to increased costs of transaction and to minimize the supply threats which were brought about by Levis.

Internal Analysis

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This internal analysis seeks to establish the strengths, weaknesses, opportunities and threats of Gap Inc. this analysis is done to access the situation which US current at Global communication.

Strengths

Gap . Inc commands a very large market in America. It has a brand that is unmatched. It has also attracted a very large number of customers since they sell their products at very affordable prices. Coupled with that, they are the leading clothing stores in America. Strengths are those factors which impact positively on an organization.

They are advantages that a company uses to overcome threats and challenges. For example, Gap is located in a very strategic place and hence easier accessibility; it has highly qualified staff, and has embraced modern technology in all its areas of operation. It also produces a variety and thus gives its customers a variety to choose from. Diversification of its business portfolio keeps it ahead of its competitors.

Weaknesses

These refer to the internal challenges within an organization that can be changed. The company has control over them.

If these weaknesses are not overcome, they impact negatively on the organization. Gap Inc has the following weaknesses that it should work on. For example, it has experienced a fifty per cent depreciation of its stock. This is down from around $29 to $10. There is a poor training program which does not equip its employees and hence they are usually unprepared when hit by market challenges.

Opportunities

These are external factors that influence the internal workings or operations of a business. These factors are usually beyond the control of a company and the organization cannot do anything to avoid them.

These are competition, technological advancement, growing needs for different products and services. Gap Inc has diversified its market to cater for other countries; it has been able to meet the different needs of its clientele. This boosts its growth since there are more sales and as a result higher profits. Given its location, it is easier for it to access modern technology cheaply. This promotes massive manufacture of its clothing and styles. (Marie, 2002)

Threats

Threats refer to those external factors which are negative for the business operations.

These factors must be overcome if the business must operate and reap high returns. These include, stiff competition, manufacture of counterfeit products and government regulations. In Gap Inc, there are factors threatening its survival. These are as follows; increased competition. This is evident from long distance, local and international markets. It has also affected cable companies which have diversified. There is also the risk of manufacturing fake products by their rival companies. These are ‘AT&T’, ‘continental communications Inc’ and ‘Verizon communications’.

The challenge is to remain profitable despite the stiff competition. (Morris, 2006) Conclusion After completing the SWOT analysis, the end result is to boost the performance of the company by increasing its profits. The secret is usually one, that is, to take advantage of the strengths to overcome weaknesses and use opportunities available to overcome threats.

References

Morris, N (2006) Understand Your Business Better, Greenwood Press, Westport, Canada.

Marie, M, (2002) Global Business Analysis, Braeburn University Press, USA.

Describe sources of internal and external finance for a selected business

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