INTERNAL FACTORS THAT AFFECT GAP INC

INTERNAL FACTORS THAT AFFECT GAP INC

1. MANAGEMENT

   • A tall organisational structure is practiced by this company
     • Decisions take longer to be made as they have ro be finally approved by the head of the chain of command which is udually the board of directors
     • When decisions take too long to be made, production will be in turn delayed. For example when raw materials that are urgently nneeded take too long to be approved, production will be slow.

2. CUSTOMERS

   • GAP Inc's USP (unique selling product) is the fact that its a store for a complete family
     • Overtime, each business sector evolves so does the fashion industry. Customers' taste changes with trends and seasons. GAP has not changed anything in particular as their customers could easily get similar merchandise elsewhere
       • When customers are not satisfied with what they are being offered they will eventually drift towards competitors for substitutes

3. COMPETITORS

   • Fashion retailers like Abercrombie and Fitch, American Eagle Outfitters and Aeropostale are the major competitors of GAP Inc

4. HEALTH AND SAFETY

   • in 2007, one of GAP Inc's supplier landed the brand in a chikd labour scandal. Children aged from 8-15 were made to hand sew in a "sweatshop" in New Delhi, India. This is not healthy and against the regualtions. Telegraph, 2007
     • This scandal led to GAP Inc shelving most of its orders that year leading to loss of revenue and resoources. COP was therefore unrecovered. The bran also reinforced prohibition against child labour by makimg a policy that if a supplier/contractor uses children to make clothes, the contractor must remove the child(ren) from the workplace and provide them with access to schooling and a wage and guarantee the opportunity of work on reaching a legal working age

5. MARKETING MIX

   • PRODUCT: The main objective is to provide for a complete family. So clothes are made for men, women and kids
     • PLACE: GAP Stores can be found in over 1500 locations in 5 countries, Unitedd States, United Kingdom, Canada, France and Japan. In shopping malls too.
     • PRICE: Moderate wholesale price. Price is based on product and ay be high/low depending on the gender and category too
     • PROMOTION: Television advertising, billboards, sales and giving funds to charity

6. SWOT ANALYSIS(see appendix 1)

7. COP

   • Suppliers will try to minimize cost of production as much as possible in order to make more profit. Only necessary raw materials are used in order to avoid wastage. For example during winter more wool will be required for production compared to during summer
     • Financial resources used in training employees can be reduced with the help of delayering the organisational structure
       • Introduction of new technology will also be efficient in the reduction of COP

8. EMPLOYEES

   • In an organisation employees are usually the ones that consumers come across first because they are the set of people that deliver the products and services being offered by the company/organisation
     • They portray the image of the brand. They have to be constantly reminded of the missions and aims of the company and how they should work towards the company's set goals and not to be particularly concerned about the money.
       • Physical appearance of employees is very paramount so employees are made to follow a particular dress code. Employees are also trained constantly
       • Communication is essential amongst employees in order to work together efficiently. A friction in communication will lead to misunderstanding and this will in turn lead to low productivity especially in a company like gap inc where diversity is promoted.
       • in march, GAP Inc. increased its minimum wage in the United States to $9 per hour in a bid to invest in front line employees. "For years the company had tried to get more people to apply to work GAP stores, only wage increase made the difference. Almost immediately we saw our applications increase by double digits" Dan Henkle, The Washington Post, March 2015. It is hereby evident that an increase in wages will boost the morale of employees to do more work. GAP news, 2015
         • Employees at GAP inc are told; think customers first, inspire creativity, do what is right and deliver results
         • Employees are provided with financial and health benefits to help employees lead thriving and succesful lives.

9. STAKEHOLDERS

   • These are the set of people that are interested in what the company has to give back to them; suppliers that do not want their contracts to be terminated, customers who want the best quality of clothes in return for the money they are paying for the products, managers and workers who want their salaries and wages to increase, financial institutions that want their loans to be returned and the community that will react to any form of pollution caused by the company
     • This set of people can not be equally satisfied therefore a balance has to be kept amongst them in order to avoid conflicts

10. ANSOFF MATRIX (see appendix 2)

11. SUPPLIERS

    • GAP Inc has a variety of suppliers and will only work with those that are able to deliver materials on time, for example if a huge order of say about 500,000 t-shirts is requested for by GAP America and the supplier happes to be in China, it will take a longer time to deliver this has there is a difference in time zone which woill slow down production and delivery, so it is only advisable and proper for them to have suppliers in every region they are located at.

12. HUMAN RESOURCE REVENUE

    • They promote the awareness of the code of business conduct to both employees and management. They maintain a balance in operations within an organisation. This department's duty is to embed compliance infrastructure in the organisation.

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