Dolmatzi Stavroula

Mission Statements

Strategic Audit HeadingAnalysis

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I. Current Situation

A. Past Corporate Performance Indexes

In comparison to 2007, GAP has increased its ROI, profitability & market share by 3.4%

B. Strategic Posture Current Mission Current Objectives Current Strategies Current Policies

•One of the leaders when it comes to International specialty clothing retailers •Each of the lines help each customer to express their individual styles. •Company’s employees and directors are responsible for acting based on the Code of Business Conduct, meaning that they must all treat each other with fairness, dignity and respect. •Code of Business Conduct: the company will always act ethically towards its employees and customers. •As for the mission statement, the objectives, their strategies and policies, the corporation states them clearly and in full detail.

SWOT Analysis Begins:

II. Corporate Governance

A. Board of Directors “The board is responsible for oversight of the business, affairs and integrity of the company, determination of the company's mission, long-term strategy and objectives, and oversight of the company's risks while evaluating and directing implementation of company controls and procedures.”Under Glenn's leadership, the company has successfully driven bottom line earnings growth by focusing on healthy margins and expense management.

B. Top Management A diverse and talented executive management team focused on executing Gap Inc.'s strategy to engage customers and maximize shareholder returns

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Analysis

(+) Factors (-) Factors Comments

III. External Environment (EFAS): Opportunities & Threats(SWOT)

A. Societal Environment

•Markets in Southeast Asia•Launch of Piperlime

•Increased competition•Remarkably easy to imitate

The advantage of this is that they will be provided with local experience, knowledge and views, something that will help them adapt to new markets more rapidly.

B. Task Environment Industry Analysis

•Growth in online retail spending•Line extensions (accessories, baby wear)

•Shoppers switched to rival clothing retailers

Threat of new entrants: HighBargaining power of buyers: MediumThreat of substitute products or services: HighBargaining power of suppliers: LowRivalry among competing firms: High

IV. Internal Environment (IFAS):

Strengths and Weaknesses(SWOT)

A. Corporate Structure

Organized Only one Global Human Resources & Corporate Affairs Executive

B. Corporate Culture Board of Directors not only meet legal requirements around the world, but also operate responsibly and with integrity in everything they do

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1. Marketing SAN FRANCISCO – Oct. 3, 2007 – Gap is proud to introduce its latest marketing campaign for (PRODUCT) RED, a for-benefit brand designed to help eliminate AIDS in Africa. Captured by acclaimed photographer Annie Leibovitz and featuring a diverse cast of socially-conscious celebrities, the new campaign underscores the idea that it is possible for an individual to change the world.

2. Finance Gap Inc. announces sales results through a press release on a monthly basis and announces quarterly earnings results through a press release, a live conference call, and webcast. Specific financial release dates are also available and can be found in reporting calendar. Gap Inc. shares its financial information to help its investors analyze the company and make informed decisions. (Gapinc.com)

3. Research and Development Focused on cost cutting, consumer research, and more targeted marketing of the three bands. Also, company-commissioned research is directing brand presidents on how they could expand the chains into “lifestyle brands”.

4. Operations and Logistics The company’s logistics network and sourcing operations for both apparel and non apparel, spanning more than 50 countries.

5. Human Resources The Executive Vice President of Gap Inc. is also in charge of human resource operations worldwide. Gap Inc. began its Human Resources organization in the year 2000.

6. Information Systems Managers were ordered to rely increasingly o software that would tell them when and by how much to mark down merchandise. (case)

External Factor Analysis Summary (EFAS)

External Factors Weight Rating Weighted Score Comments

Opportunities

Growth in online retail spending .10 4 .40 Predicted to increase online sales

Line extensions (accessories, baby wear) .15 5 .75

Gap, GapKids, BabyGap & GapBody.

Markets in Southeast Asia .20 3 .60Franchise agreements to generate growth.

Launch of Piperlime .10 3 .30Online retail company (footwear & handbags)

Threats

Shoppers switched to rival clothing retailers .20 3 .60 Shoppers chose fresher competitors

Increased competition .10 2 .20Competing with discount retailers (Target & Wal-Mart)

Remarkably easy to imitate .15 2 .30 Gap's khakis-and-blue shirt formula

Total Scores 1 3,15

Internal Factor Analysis Summary (IFAS)

Internal Factors Weight RatingWeighted Score Comments

Strengths

Brand recognition .10 4 .40Founded in 1969, more than 3,000 stores

Appeal to broad target market .15 5 .75

Men, women, children, babies, accessories, e.t.c.

Large network of physical stores .15 5 .75

US, Canada, France, Japan, UK, e.t.c.

Marketing campaigns .10 3 .30TV ads, in store promotions, print ads, direct mail, outdoor ads

Cut 9-month production cycle to 3 months & customize deliveries .10 3 .30

Adapt to emerging trends more rapidly

WeaknessesStruggle to recapture customers who had abandoned it. .10 1 .10 Perception problem

Decline in revenues .15 2 .30Revenues decrease from 2005 to 2006

Overdependence on North America .05 3 .15

Gap relies too much on the US (83,6% of revenues)

Shut down of Forth & Towne .10 1 .10 Open in 2005, closed in 2007

Total Scores 1 3,15

Financial Ratios

http://financials.morningstar.com/income-statement/is.html?t=GPS&region=USA&culture=en-US

Income Statements, Balance Sheets, Cash Flows & Financial Ratios

Strategy Factors Weight Rating Weighted score

Short Intermediate Long Comments

S01 Brand recognition .05 3 .15 X More than 3,000 stores worldwide

S2 Appeal to broad target market

.15 4 .60 X Men, women, children

S3 Large network of physical stores

.15 4 .60 X X US, Canada, France, Japan, UK

W3 Overdependence in North America

.05 2 .10 X 83,6% of revenues

W2 Decline in revenues .15 2 .30 X X Decrease from 2005 to 2006

O2 Line extensions .15 5 .75 X X Predicted to increase online sales

O1 Growth in online retail spending

.10 3 .30 X babyGap, GapBody

O3 Markets in Southeast Asia

.10 2 .20 X Generate growth.

T1 Shoppers switched to rival clothing retailers

.05 3 .15 X X Chose fresher competitors

T2 Increased competition .05 2 .10 X Tiger, Wal-Mart, Abercrombie

Total Score 1.00 3,15

Analysis of Strategic Factors (SFAS)

Industry InformationFirst Gap store in San Francisco in 1969. Gap Inc. has a number of brands containing Gap (including Gap, GapKids, BabyGap, and GapBody), Banana Republic, Old Navy, Piperlime, and Athleta. Outlet stores such as Gap Outlet, Gap Generation, and Banana Republic Factory Stores. Over 3,200 stores worldwide with 3,100 company-operated stores located across the United States, United Kingdom, Canada, China, France, Ireland, Japan, &Italy.200 franchise stores in locations across Asia, Australia, Europe, Latin America, the Middle East, and Africa. They are well known around the world with over 134,000 employees.

Gap Inc. in 2011:Gap Inc. has a number of brands containing Gap (including Gap, GapKids, BabyGap, and GapBody), Banana Republic, Old Navy, Piperlime, and Athleta. There are over 3,200 stores worldwide with about 3,100 company-operated stores located across the United States, United Kingdom, Canada, China, France, Ireland, Japan, and Italy and about 200 franchise stores in locations across Asia, Australia, Europe, Latin America, the Middle East, and Africa. Gap Inc. also offers outlet stores such as Gap Outlet, Gap Generation, and Banana Republic Factory Stores. They are well known around the world with over 134,000 employees.

Gap Inc.

Governance & Compliance

Corporate GovernanceGap Inc. was founded in 1969 on the principle of conducting our business in a responsible, honest and ethical manner. For us, good corporate governance means going beyond compliance. It means taking a leadership role in instituting and maintaining practices that represent strong business ethics — and ensuring we communicate consistently with our shareholders, customers and neighbors around the world.We are committed to continually evolving and adopting appropriate corporate governance best practices. Gap Inc.'s Corporate Governance Guidelines were most recently updated in 2011.

Corporate ComplianceGap Inc. was founded on the principle of doing business responsibly, honestly and ethically. We take corporate compliance very seriously. Our comprehensive corporate compliance program is designed to ensure that all employees and the company's Board of Directors (directors) not only meet legal requirements around the world, but also operate responsibly and with integrity in everything they do.A combination of written guidelines, formal processes and management oversight helps us ensure that "strong corporate compliance" aren't just words on paper, but a way of doing business at Gap Inc.