SWOT Analysis of GAP
Gap is a famous US clothing and accessory fashion brand. Let’s learn about the store and do the SWOT Analysis of GAP. It was founded by Doris F. Fisher and Donald Fisher in 1969. Presently, its headquarter is in San Francisco, California, USA. Gap offers everything from women’s sweaters to tops, sweatshirts, jumpsuits, babies’ clothes, men’s variety, and accessories. Its versatile product portfolio is one of its biggest strengths. In 2021, the annual revenue of the brand was 16.7 billion dollars. Gap has successfully managed a prominent place in the retail and lifestyle sector. The brand has hired 117000 employees till now to run its global operations smoothly.
The fashion industry is packed with notable names like American Eagle, Zara, Gucci, Versace, Levi’s, Nordstrom, Macy’s, H&M, J.Crew, Madewell, and many others. They are the main competitors of Gap. So, the business environment of the brand is really competitive. In this post, we will conduct the SWOT analysis of Gap by investigating its strengths, weaknesses, opportunities, and threats. The first two factors are internal, whereas the remaining two are external points. So, let’s begin!
SWOT Analysis of GAP
Company Name: Gap, Inc.
Founders: Doris F. Fisher, Donald Fisher
Founded: August 21, 1969, San Francisco, California, USA
Headquarters: San Francisco, California, United States
CEO: Sonia Syngal (March 23, 2020-)
Type: Apparel and Accessories
Sector: Lifestyle and Retail
Tagline: For every generation there’s a Gap; Away we go
Unique Selling Proposition: One store for all the customers
Customers: People looking for everyday clothes and accessories
Target Consumers: Luxury segment brand for all age groups
Revenue: 16.7 billion dollars (2021)
Net Income: 256 million dollars (2021)
Strengths of Gap | SWOT Analysis of GAP
- Aggressive Marketing:
The biggest strength of the brand is its aggressive and diverse marketing strategy. The company uses several media platforms and marketing channels to promote its services and products. The main customers of the brand were young people because it used to sell Levi’s products. But, they started selling vide variety of products, and now it is providing fashionable clothes to different customers and demographics.
- International Brand:
Gap has a strong worldwide presence in almost 43 countries. It offers its products through different platforms, including online channels. As a result, it sells its products online in more than 90 countries such as the UK, the USA, Mexico, Italy, Canada, France, China, Ireland, Japan, Taiwan, and many more. The company has more than 3250 brand stores across the world.
- Versatile Portfolio:
The product portfolio and services of Gap are really diverse. They have an amazing collection of men’s, women’s, and kids’ clothes and accessories. It is also running some subsidiaries with the name GapFit, Old Navy Global, GapKids, Banana Republic Global, GapMaternity, and others. These subsidiary brands are very famous among various segments and they can easily get what they want. This shows how Gap is targeting several segments or customers successfully.
- Adapting Latest Trends:
There is no doubt about it that Gap’s products are high quality and versatile. In order to retain its customers, the brand follows all the changing trends and demands of shoppers. The company provides relevant products to customers to fulfill their requirements. This factor gives Gap a competitive advantage over its competitors.
The brand has a huge focus on sustainability and they are very well aware of the climate concerns. Due to this reason, the brand uses very less water in the manufacturing of tee shirts and jeans. Its subsidiary brand Athleta uses sustainable materials in manufacturing. The company is also trying to reduce its carbon footprint.
- Strong Supply Chain Network:
The robust and efficient supply chain network is another huge strength of the brand. Its speedy supply chain network enables the brand to sell its latest products in the market. They use high-quality materials and fabric in their clothes. As a result, the company produces high-quality, fashionable products for different segments.
- Brand Value:
In 2020, the brand value of Gap was 12.23 billion dollars, according to Forbes. The company has strong brand value globally. It has won several awards and accolades for sustainability, fashion trends, and quality.
Weaknesses of Gap | SWOT Analysis of GAP
- Weak Presence:
Though the brand has a strong worldwide presence, its position and presence in developing countries are weak. They have a limited presence in developing markets. These markets can offer boost and growth opportunities to Gap. The brand must focus on this factor in order to mitigate its weakness.
The retail and lifestyle sector is pretty much crowded with several big brands like Gucci, Zara, Versace, American Eagle, Madewell, Nordstrom, and others. They are offering the same products with better quality and price. Nowadays, customers are very price-conscious. So, these competitors can damage the sale and revenue stream of the brand.
- Limited Offerings:
The most selling products of the company are V-neck tees, sweaters, jeans, and sweatshirts. It is because they do not have much to offer and they lack in their product versatility. These days, young customers want to try something different other than tees and jeans. They don’t like old stuff and trends. This weakness can disrupt the working of Gap. It is imperative for the brand to offer something unique to attract Gen-Z and millennials.
Opportunities for Gap | SWOT Analysis of GAP
There are countless growth opportunities for the brand within the sector. The gap brand can expand its business through other fashion brands by collaborating with or acquiring them. They can help the brand to promote or advertise its products and services globally. On the other hand, Gap has nominated various brand ambassadors like Wiz Khalifa, Priyanka Chopra, and others. The brand should follow this method and hire more celebrities and influencers.
- Online Shopping Trend:
The trend of online shopping has increased in the past few years, especially during the pandemic. Covid-19 has amplified the trend of online shopping. The brand has a strong e-commerce platform. The company can increase its online sales by targeting customers and selling products online.
- Focus Developing Markets:
The brand has a limited presence in several developing countries like China, Europe, and Asia. These markets are huge and the company can enhance its business and revenue by targeting developing markets. The company should open its new stores and online platform in these countries to take the lead.
Threats to Gap | SWOT Analysis of GAP
- Increasing Raw Material Cost:
The increasing labor cost, supply chain cost, marketing cost, and raw material costs are continuously disturbing the business operation of Gap. These factors have increased the production cost of the brand. It is impossible to produce high quality products at low prices in this situation. So, its prices are increasing day by day, which is really alarming for its growth. The customers can find other brands of substitutes due to the company’s high prices. It won’t be good for the brand’s profitability and reach.
- Changing Trends:
Fashion is an ever-evolving thing, and it is hard to stay up-to-date all the time. Continuously changing fashion trends are creating a serious threat to the brand. The brand is under serious pressure to produce the latest designs and patterns. It is increasing the marketing and design expenses. It would hurt the profitability of Gap.
- More Trendy Clothes:
Several fashion brands are providing trendy clothes at attractive prices. They are threatening the sales and reach of the brand. They are damaging the company’s image at the international level. The brand must analyze these factors carefully.
Final Words | SWOT Analysis of GAP
We have realized from this study that Gap is one of the leading retail fashion brands in the world. Moreover, it is a strong luxury fashion brand that offers products to every customer segment. It is facing some issues like increasing production costs, changing fashion trends, and more. But, the company can overcome these issues by designing new and affordable products. The company should expand its business in developing markets to gain fame and revenue.
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