Internal Analysis

​ Gap's inbound logistics consist of over 800 vendors from 30 different countries. With the

large majority of Gap’s products coming from different countries. The majority of purchases

come from Vietnam, China and Indonesia (GAP Inc.). Gap has started to make shipping more

efficient by using souring countries that are closer to the final destination. They utilize

co-location, where garment production happens in the same country as raw material processing,

reducing transit time between mills and vendors. (Gap Inc Co-location). This starts to bring

together inbound and operations which streamlines production and reduces cost. Gap's

operations rely mostly on independent manufacturers. The company closely manages quality

control, efficiency, and benefits from economies of scale with its many vendor partnerships.

​ Gap’s Marketing and Sales tries primarily to focus on the younger generations, but they

make clothes that can appeal to everyone. In Gap’s advertisements they use real people rather

than professional actors and models in hopes of trying to connect with people more. They try to

position themselves as an integrated cost leadership who can provide customers with good

quality clothes that are affordable. Gap often creates clothes that are inspired by new trends and

new pop culture.

​ Customers who order online also have the option to pick up in store which can speed it

up for the consumer. Gap tries to ship with the most efficient carrier for the order, and doesn't

seem to prefer one over the other (Gap shipping). Gap has over 3,000 stores in varying countries.

Gap also has a large number of their sales coming from their website. As of 2021 Gap has over

100,000 employees (GAP Inc.). Moving to customer service, Gap’s service for returns is aligned

with the industry. Gap, Athleta, Old Navy, and Banana Republic have a return policy of 30 days

of purchase(Gap Inc. Return Policy). This is attractive to customers that might be skeptical of
their products. On top of all that, they’ve improved in-person sales by incorporating more

technology into making the purchase and finding process easier. They’ve done this by

incorporating buy online pick-up in store, order-in-store, find-in-store, and ship-from-store (K-10

pg 1,25)

External Analysis

Five Forces:

Threat of new entrants: Moderate. According to the website Human B, clothing brands

could be fully started and operational in 6 months. The increasing online presence of shoppers is

providing a very attractive opportunity for new entrants. There are significant challenges for new

entrants to compete with Gap at the level of a large corporation, including having capital and

distribution capabilities.

Bargaining power of suppliers: Gap has identified that bargaining power of suppliers is

weak, though there is great potential for Gap to be “adversely affect[ed]” in regard to its “sales

and… operations” (K-10 pg 12). “Independent third parties manufacture all of” Gap’s

merchandise providing a large potential threat to the company if demand is to increase or there is

a need to replace an existing vendor (K-10 pg 12). Changing one individual supplier would be

easy, and Gap has done this in the past.

Threat of substitutes: The threat of substitution is quite low. There are a couple potential

substitutes for new clothing: thrift shop clothes or used clothes, and handmade clothing. Gap has

strategically involved itself in many different clothing lines, limiting the threat of substitution.

Bargaining power of buyers: Gap has identified that if it is unable “to respond

effectively… to changes in retail markets or customer expectations…, operations would be

to buy from but Gap doesn’t rely on any one buyer, making the bargaining power of buyers low.

Competitive rivalry: Gap has identified that they compete with “local, national, and

global department stores” among others (K-10 pg 9). This means they have a wide variety of

competitors to look at on many different levels of sales. Gap competes with companies such as

Ross, TJ Maxx, Macy’s, Dillard’s, Fabletics, and Nike. There are some companies that pose a

bigger threat than others.

General Environment: The overall attractiveness of the clothing industry for Gap is

moderate. Gap has a high level of competition, but the other five forces are in favor of Gap. Gap

is currently facing a difficult environment due to tariffs being placed on many of its supplier

nations. This creates a great threat to the supply chain of Gap. Another potential threat that Gap

is considering is the changing of customer tastes and preferences (K-10).

Business Level Strategies

Gap’s Strategy: Their strategy is best described as an integrated cost leadership strategy,

blending affordability with trendy and differentiated clothing. Gap appeals to a broad customer

base and encourages one stop shopping through a wide product variety. Unlike low quality fast

fashion brands, Gap emphasizes better materials and craftsmanship to ensure longer lasting

clothing (Flanagan). While Gap has been primarily brick and mortar stores, the retail landscape

changes. Gap is adapting to this by investing heavily in its online presence, offering digital deals

and reaching customers beyond its physical store locations (GAP).

Old Navy’s Strategy: They follow a cost leadership strategy. They focus on offering

stylish clothing at affordable prices. Their marketing efforts span TV, print, and social media,

reinforcing their brand image as both trendy and cost effective. To support accessibility, Old
Navy maintains a widespread network of physical stores along with a strong e-commerce

platform, ensuring customers can easily shop for affordable fashion wherever they are (GAPinc).

Banana Republic’s Strategy: They employ a differentiation strategy. Their apparel is

designed for modern, style conscious consumers that are seeking sophisticated, timeless fashion.

Recently, their efforts to reinforce its premium positioning include upgrading product materials,

modernizing store layouts, and enhancing its online presence to create an aspirational and refined

shopping experience (GAPinc).

Athleta’s Strategy: They follow a focused differentiation strategy by offering high quality

and performance driven athletic apparel specifically for women and girls. Key elements of their

approach include product innovation, premium materials, customer feedback, and a mission

driven brand identity ([Link]). Athleta also strengthens customer loyalty through community

engagement, such as fitness events like the “Move with Athleta” series([Link]).

Corporate Level Strategy

​ Gap is using a related constrained diversification strategy. The subsidiaries of Gap each

provide less than 70% of total revenues: Old Navy contributing 53%, Gap 24%, Banana

Republic 13%, and Athleta 10% (Gap Inc Supplemental Earnings). With its subsidiaries all being

in the same industry of clothing, they are able to utilize the same supply chain and distribution

processes along with sharing websites and technology used to run the companies.

Cooperative Strategies

In 2007 Gap and Banana Republic expanded into Saudi Arabia and Turkey with over a

hundred stores through a partnership with local retailers(GAPinc). These countries had strong

growing economies with consumers taking an interest in fashion. In these locations the store

would be operated by the retailers they made deals with, but have access to all the resources from
Gap. These partners were the only ones in these countries allowed to sell Gap and Banana

Republic products, but they were also held to quality standards. This wasn’t the last time that

Gap Inc expanded internationally though, in 2014 they announced more plans to expand into the

middle east into different countries(GAPinc). The partners chosen for these expansions had

excellent tract records while they already manage more than one brand. This time Old Navy

expanded, because they thought that values best matched these countries.(GAPinc). The

cooperative strategies used were to help Gap Inc. and its other associated companies grow while

maintaining minimal risk. By using retailers that were already established in these regions they

can minimize cultural misunderstanding. Both of these expansions were times that Gap was

having a lot of success, and was able to take a risk that had a very high upside (GAPinc).

Governance and Leadership

GAP Inc.:Richard Dickson is the current president and CEO of GAP Inc. and is the

acting CEO of Banana Republic. He moved into the position of CEO at GAP Inc. in August of

2023. Previously, Dickson has worked at Mattel as COO, Branded Business as CEO, co-founded

[Link] and worked as an executive at Bloomingdale’s (GAP Inc.). Richard Dickson is over

GAP Inc. along with all of its subsidiaries.

GAP Brand: Mark Breitbard is the CEO of Gap. He began his tenure over Gap Global in

2020 after having many successful years with GAP Inc. including a three-year stint as the CEO

of Banana Republic (GAP Inc.). Breitbard’s current focus is on turning around the Gap brand

“through new positioning and a new operating model” (GAP Inc.).

Banana Republic: Richard Dickson is currently serving as the acting CEO of Banana

Republic, following a mutual decision between him and former CEO Sandra Stangl to conclude

her tenure with the company (Danziger, 2024). The leadership change was attributed to Stangl’s
unsuccessful effort to expand the brand into the home furnishings market (Danziger, 2024).

Dickson will continue in the interim role until a permanent CEO is appointed.

Old Navy: Haio Barbeito, the current President and CEO of Old Navy, brings over 26

years of international leadership experience from Walmart. At Old Navy, he oversees key areas

including merchandising, marketing, supply chain, and store operations, with a focus on

delivering stylish, affordable clothing. His leadership centers on customer empathy, operational

excellence, and innovation, helping the brand stabilize after challenges like a 12% same-store

sales decline in 2022 and positioning it for future growth (GAPinc)

Athleta: Chris Blakeslee, the current President and CEO of Athleta. He brings a strong

background in industrial manufacturing, apparel retail, and distribution. Blakeslee oversees

product innovation and champions the brand’s mission to empower women and girls through the

"Power of She" initiative. He is focused on strengthening Athleta’s market presence, enhancing

its product line, and expanding its omnichannel shopping experience (GAPinc).

Suggestions for the Future

Gap has been trying and failing to target a younger demographic for their product. The

first step Gap should do to fix this is define for themselves what makes them cool and unique.

They need to find their niche. Secondly, they could collaborate with celebrities who are relevant

to the younger generations, probably content creators. Thirdly, they could increase their digital

presence. As times change people are buying more from the internet and less in person. Lastly,

Gap should have a focus on restructuring its corporate structure to better align with the above

priorities.
Citations:

1.​ Flanagan, Joe, et al. “Loved by Millions, Is Gap a Good Brand?” 90s Fashion World,

December 21, 2021. [Link]

2.​ GAP Inc. Gap Official Website. [Link] Accessed February 21, 2025.

3.​ GAP Inc. Form 10-K.

[Link]

[Link]. Accessed February 21, 2025.

4.​ University of Nebraska-Lincoln. Athleta B Corporation Case Study. Digital Commons.

[Link]

5.​ Waldow, Julia. "Athleta’s Revamped 2024 Strategy Includes Fitness Classes, Product

Drops." Modern Retail, 2024.

[Link]

-classes-product-drops/.

6.​ Danziger, Pamela N. "Banana Republic CEO Departs, Signaling a Return to Fashion

Fundamentals after Misstep into Home." Forbes, May 6, 2024.

[Link]

aling-a-return-to-fashion-fundamentals-after-misstep-into-home/. Accessed March 20,

2025.

7.​ Gap Inc. "Executive Leadership Team."

[Link] Accessed

March 20, 2025.

8.​ Gap Inc. [Link] Accessed March 20, 2025.

[Link]

[Link].

10.​Gap Inc. Return Policy. April 13, 2025.

[Link]

kid=13192220b737626a01403031b6aa633f.

11.​Gap Inc. Co-location: Three Ways Gap Inc. Is Using Scale to Speed Up Its Supply Chain.

April 14, 2025.

[Link]

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All group members contributed equally.