Strategic Audit of the Gap, Inc.
Strategic Audit of The Gap, Inc.
Submitted by: Chris Bess, Teddy Ormsbee, Tiffany Sayers, and Jeremey Williams
Submitted to: Professor Ditmore
13 April 2010
Table of Contents I. Current Situation: The Gap in 2002 3 A. Past Corporate Performance 3 B. Strategic Posture 4 II. Corporate Governance 5 A. Board of Directors 6 B. Top Management 7 III. External Environment: Opportunities and Threats 8 A.) Societal Environment 8 B.) Task Environment 10 IV. Internal Environment: Strengths and Weaknesses 11 A. Corporate Structure 11 B. Corporate Culture 12 C. Corporate Resources (Value Chain Analysis) 12 V. Analysis of Strategic Factors 15 A. Key Internal and External Strategic Factors 15 B. Review of Mission and Objectives 16 VI. Alternatives and Recommendations 16 A. Strategic Alternatives 16 1. Growth 16 2. Stability 18 3. Retrenchment 18 B. Recommended Strategy 19 VII. Implementation 19 VIII. Evaluation and Control 21 References 22
Appendices……………………………………………………………………………………….23
I. Current Situation: The Gap in 2002 Gap, Inc’s existence began in 1969 as a small single store. Over the years it has expanded to a multi-national corporation and has undergone numerous transformations that have earned it the recognition of a leading specialty retailer. The Gap division of Gap Inc., which consists of Gap, GapKids, BodyGap, and babyGap offers an extensive array of product lines that include clothing, accessories and personal care products for men, women, children, and babies (gapinc.com). Despite the company’s great feats, however, by 2002 Gap Inc. was suffering from significant losses and deteriorating credit scores that were only exasperating its financial woes. This in depth strategic audit will draw a complete picture of Gap’s situation in 2002 and offer strategic recommendations for the suffering company based on this analysis. A. Past Corporate Performance Gap has reported losses in
Submitted by: Chris Bess, Teddy Ormsbee, Tiffany Sayers, and Jeremey Williams
Submitted to: Professor Ditmore
13 April 2010
Table of Contents I. Current Situation: The Gap in 2002 3 A. Past Corporate Performance 3 B. Strategic Posture 4 II. Corporate Governance 5 A. Board of Directors 6 B. Top Management 7 III. External Environment: Opportunities and Threats 8 A.) Societal Environment 8 B.) Task Environment 10 IV. Internal Environment: Strengths and Weaknesses 11 A. Corporate Structure 11 B. Corporate Culture 12 C. Corporate Resources (Value Chain Analysis) 12 V. Analysis of Strategic Factors 15 A. Key Internal and External Strategic Factors 15 B. Review of Mission and Objectives 16 VI. Alternatives and Recommendations 16 A. Strategic Alternatives 16 1. Growth 16 2. Stability 18 3. Retrenchment 18 B. Recommended Strategy 19 VII. Implementation 19 VIII. Evaluation and Control 21 References 22
Appendices……………………………………………………………………………………….23
I. Current Situation: The Gap in 2002 Gap, Inc’s existence began in 1969 as a small single store. Over the years it has expanded to a multi-national corporation and has undergone numerous transformations that have earned it the recognition of a leading specialty retailer. The Gap division of Gap Inc., which consists of Gap, GapKids, BodyGap, and babyGap offers an extensive array of product lines that include clothing, accessories and personal care products for men, women, children, and babies (gapinc.com). Despite the company’s great feats, however, by 2002 Gap Inc. was suffering from significant losses and deteriorating credit scores that were only exasperating its financial woes. This in depth strategic audit will draw a complete picture of Gap’s situation in 2002 and offer strategic recommendations for the suffering company based on this analysis. A. Past Corporate Performance Gap has reported losses in
References: “Form 10-K Gap Inc.” U.S. Securities and Exchange Commission. 04 Feb. 2002. 10 Apr. 2010. <http://www.sec.gov/Archives/edgar/data/39911/000102140802004717/0001021408-02-004717.txt>. Forbes.com. 2010. Morningstar. 25 Mar. 2010. <http://people.forbes.com/search?name=&ticker=GPS>. Gap Inc.. 2010. 28 Mar. 2010 < http://www.gapinc.com/public/index.shtml>. Mannin-Shaffel, Vivian. “Can Gap Mend its Brand?” brandchannel. 1 Apr. 2001. 29 Mar. 2010. < http://www.brandchannel.com/features_effect.asp?pf_id=86>. Raine, George. “Refocusing Gap. Analysts look for results as S.F. retailer implements turnaround plan.” Clothes For a Change. 25 Nov. 2001. Organic Consumers Association. 9 Apr. 2010. <http://www.organicconsumers.org/clothes/gaptrouble.cfm>. Wheelen, Thomas L. and J. David Hunger. Strategic Management and Business Policies. 11th ed. Upper Saddle River, NJ: Pearson Prentice Hall, 2008.