Gap Inc.

320 Words2 Pages
What does a five-forces analysis reveal about the strength of competition in the U.S. family clothing store industry? The retail clothing industry is highly competitive, with buyer power being the strongest force. The raw materials needed for manufacturing are relatively abundant, which limits supplier power and allow room for price negotiating. There is low cost of entry, so the industry is flooded with competitors and knock-off substitutes, but it’s the consumer who decides what is fashionable and trendy. Cost and comfort must also appeal to the customer. The retail clothing industry is driven off customer loyalty, and must constantly adapt to the customers economic needs. 2. What factors are critical to success in the U.S. family clothing stores industry? Brand recognition is the biggest factor to success in the U.S. clothing stores industry. A successful retail company is one that makes comfortable, affordable, and fashionable clothes. Gap Inc. has gone through several changes in order to continue to meet these customer demands. 3. Develop a competitive strength assessment of the four major competitors in the U.S. family clothing stores industry using methodology presented in Chapter 4. Based on the results, who is in the strongest overall competitive position? Who is in the weakest? A competitive strength assessment shows Gap Inc. to be the strongest competitor, and Abercrombie & Fitch to be the weakest. Gap Inc. holds 15% of the market, while Abercrombie & Fitch has 4.1%, the lowest of all. Abercrombie & Fitch fit’s a specific niche category, that is not in demand due to economic downturns. TJX is slightly behind Gap Inc. in the market share, but Gap Inc. has better brand recognition in the U.S. 4. What is Gap Inc.’s strategy? Which of the five generic strategies discussed in Chapter 5 most closely fit the competitive approach that Gap is

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