Gap Questions

GAP CASE

Assignment Questions

1. What does a five-forces analysis reveal about the strength of competition in the U.S. family clothing stores industry?

2. What factors are critical to success in the U.S. family clothing stores industry?

3. Develop a competitive strength assessment of the four major competitors in the U.S. family clothing stores industry using the methodology presented in Chapter 4. Based on the results, who is in the strongest overall competitive position? Who is in the weakest position?

4. What is Gap Inc.'s strategy? Which of the five generic competitive strategies discussed in Chapter 5 most closely fit the competitive approach that Gap is taking? What type of competitive advantage is Gap trying to achieve?

5. What does a SWOT analysis of Gap reveal about the overall attractiveness of its situation?

6. What is your overall appraisal of Gap's financial performance? (Use the financial ratios in Table 4.1 on pages 94-96 of the text as a guide in doing your financial analysis.)

7. What recommendations would you make to Gap senior management to improve upon its turnaround strategy? What actions are necessary to restore the competitiveness of its core Gap, Banana Republic, and Old Navy brands?

ADDITIONAL QUESTIONS AND INSTRUCTIONS FOR GAP INC CASE

Q1. Be sure to assess the overall attractiveness of the family clothing store industry at the conclusion of the 5 Force Analysis.

Q3. You need to construct a Competitive Strength Assessment table.

Q4. List the different key elements of Gap's strategy. In other words, what actions and tactics have been implemented?

Hint: there are several.

Q5. Develop lists for each of the SWOT categories. Hint: GAP has quite a few resource strengths and competitive assets. What do you conclude from your SWOT analysis?

Q6. Use the financial ratios in Table 4.1 in Chapter 4 to help you analyze Gap's financial position. As shown by the numbers you calculate, what trends in expenses, operating profit margins, working capital, inventory management, etc. are evident? How do the different businesses (Gap, Old Navy, Banana Republic) compare? What do same store annual revenues compare? What grade do you think Gap's overall financial performance merits (A? C? F?) and why?

Answering this question requires some work and calculations and there's a lot of data in the case available to do it. Be sure to have your answers ready to discuss in class. All you accounting and financial majors should find this question easy to handle!