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Bridging the Gap

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Submitted By xiaw12
Words 696
Pages 3
MBA 649
Business policy
Weiliang Xia
In 1969, Don Fisher opened the first Gap store in direct response to frustrations he was feeling as an inconvenienced customer. Its unprecedented growth is a direct result of meeting a niche in the clothing market, at a time when The Gap was well positioned to meet the new demands of this "business-casual" trend, introducing other chains to expand its customer base, and aggressive expansion in the global marketplace. Today, Gap, inc. is recognized as one of the world's largest specialty retailers. It. operates four of the most well known clothing brands on the planet: Gap, Banana Republic, Old Navy, and Forth & Towne. The Gap was bound for success early on because the utility of its product mix was perfect for a specific market segment. The Gap offered a classic line of khaki pants and cotton button-down shirts, perfect for the new "business-casual" look, and gained great brand recognition as a result. With product utility, a product mix that met the needs of its target audience, brand name recognition, and global influence as its core strengths, the Gap, Inc. was in good position to grow through expansion.
Understanding the key issues underlying the Case Study is imperative to determining an appropriate plan of action. Two key issues stand above the rest in this case; 1) Rapid growth of business acquisitions and expansion without properly researching the wants and needs of its customers, and 2) Trying to be all things to all people and losing focus by introducing a product mix incongruent to the desires of the target market. Having more stores may help increase sales in the short term but the long term expenses and loss of revenue due to poor sales ultimately results in a situation where inventory is high (because of lack of sales), and dividends are low (loss of stock value). It is also unrealistic for a company to

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