Strategic Management Analysis

Introduction

Strategic management is the process of implementing different strategic and aligning the performance and gaining proper business results. An effective process is seen in strategic management so that technologies, employees and the whole organization can be brought into the work so that the organization can gain a positive effect in their business. The selected organization is GAP and strategic management in GAP is being defined here in this report for getting a proper understanding of their business. A BCG model is presented so that organization direction and their future inspection can be understood by people. Organization strategy with SAF framework is also defined in this paper so that their strategy in management can be understood here.

Background of the company

GAP is an international retailer organization that has been rooted in California since 1969. GAP has different branches for GapKids, babyGap, GapBody and Gap Outlet. GAP is a global organization situated in the US and has branches established in the UK, Japan, France and Germany. It has approximately 150000 employees working in the organization and have a good name in earning good profit in their revenue since past few years. GAP has seen a great expansion in their business since its establishment in 1990. They generally focus on creating an emotional connection with their customers so that they can attract a number of customers for their products and can gain a good name for their business.

PESTEL analysis for GAP micro and macro environment

Political

This is an important factor that determines the long term profitability in certain markets. The apparel stores and profitability in the business can be gained by the help of this political factor. Some of the factors are described below:

Military invasion risk for GAP

Corruption is also a great aspect for their business to grow in the market.

The bureaucracy and the interference in apparel strategy formation is required in this case.

The property protection of the business is required in this case.

Taxation and imposing cash revenue can be loss to the business for GAP.

The industrial safety and security regulations are required to be seen in this case (Businessoffashion.com, 2019).

Economic

Inflation rate, serving rate, foreignh exchange rate and economic cycles are an important aspect of aggregating the investment in the economy.

There are following economic factors:

Involvement of government in free marketing and services related to their business.

The efficiency of financial markets are to be looked out thoroughly so that capital revenue can be generated easily and in good amounts.

Labor cost and economy in the productivity of the economy (Song, 2017).

The inflation rate, interest rate, economic growth rate and discretionary income can be seen to be involved in this economic part of GAP.

Social factor

Shared values and the attitude of the population are an important aspect of business for the GAP industry here. There are following factors for social part:

Demographics and the skill level of population is an important aspect of this business.

The cultural and traditional aspects are an important aspect of this industry.

Entrepreneurial nature of the society helps the GAP to develop in the business (Islam, M, 2017).

Attitude and the leisure interest is seen to be important to gain the economic condition for GAP.

Technological

Technological aspects in transportation and other aspects for business can be seen to be an important aspect for them to grow in the market.

Following are technological factors:

The recent technological development is an important aspect for the businesses to grow in the market.

The impact and advantages of product in the industry can be seen to be an evolving one for the business.

An impact on cost structure and the value chain can be seen in this part easily.

Environmental factor

Different environmental and legal laws are present that can be beneficial for the business to grow. There are following environmental factors:

Climatic changes

Laws related to environmental pollution

Water and air pollution regulations

Waste management in service sectors

The renewable energy consumption and safety

Legal factor

The antitrust laws and deiscrimation laws for the business are to be followed up properly.

The intellectual property law is to be followed up properly (Oesterreich, 2016).

Health and safety and consumer protection law.

Internal business

The utilization of resources are seen to be a vital part of this internal business environment. SWOT analysis is required so that company's internal strategies can be managed easily and internal environments can be managed easily. In this part is the internal opportunities, strength and weakness are possible to be seen in the internal business management of GAP. GAPs internal strength can be discussed as the net profit and strong brands franchise. Extremely famous ads were promoted by GAP so that internal business can be carried out easily by GAP. A well developed code of ethics is being demonstrated by GAP so that it can be followed by the customers easily. Therefore around 65 languages these policies and rules were established so that guidelines, retaliation, following the policies and various others are to be seen in this part for the business internal aspect. Employee and managers could follow the business ethics so that collaborative works can be followed up easily and the conficts or any discrimination in GAP could be addressed easily (Lotsofessays.com, 2020).

SWOT

Strength

GAPs reputation and well developed names around the world is an effective one for their business to grow. GAP has few brands such as Gap, Old Navy and Banana Republic that is established in Germany, Japan and other European countries and provides a good phase for the business. GAP is a multidimensional company with the best infrastructure that is generally helpful for their business. An external expansion of their business and widespread stores in different countries that have brought a strong name for their appealing industry (Yue,2018). Moreover their experience in venturing and promotion is also an effective one for their business growth.

Weakness

A high price for their products can be an effective one for their business as it is out of reach from various people having low income. It is only oriented to one sector which is the garment industry and any effect in the garment industry will directly or indirectly will be affecting their business (Luo, 2018). The biggest lack in their business is their focus and experience in few of Asian or european markets.

Opportunity

A great opportunity in their economic scale can besen easily in this case. A low cost of workers and labourers can help the business to decrease the cost of investment and productions. An advantage in gaining the profit in their business can be seen easily in this case. In developing countries the stores of GAP could gain legal and political help. The health and safety regulations could be libeal and beneficial for their business.

Threat

The government rule and regulations could be both a threat and opportunity for GAP business. These regulations are generally unpredictable and can be changing as per the business in certain countries. They can also change according to the time (Phadermrod, 2019). The competitive market of garments can be a great threat for their business that can be a milestone in their growth in business. Different countries have different tastes regarding clothing and thus the business can have problems growing in certain regions.

Threat to new aspect

By the help of innovation and introducing new products can be a beneficial one for the marketing here. Application of lower cost items and providing a new value of preposition for the consumers is also an important aspect here. Spending money on research and methodologies are also an important aspect here.

Bargaining power of supplier

An effective supply chain is required to build in this case for the business to grow. A negotiating power to decrease the prices in the costlier market can be effective in this case (Knepublishing.com, 2019).

Bargaining power of buyer

A large customer base is required to be built so that business can gain a good aspect in the market and demands couldnt be brought down. Working on innovative products can be helpful for the business and for the defection of existing customers.

Threat for subtle product

The service orientation is highly seen rather than looking for the product orientation (Ge, L. and Li, C., 2019). By switching the cost of customers in the business.

Rivalry among the existing player

The good partnered organization is required to be built so that a competitive environment can be tackled easily. Moreover collaboration with competitors can be helpful in the business to grow in the market (Bit.bdu, 2019).

3.0 Organization direction by bcg or McKinsey

BCG is helpful in describing the cash flow and investment characteristic in GAP. Gaps personal strategy and strength for their vbusiebnss could be gained easily by the help of this BCG model. From their total cash and revenue growth they are focussed gaining the profit from their organization. BCG matrix is successful in describing the strategies that can be implemented in GAP organization.

There is following BCG matrix of GAP Inc:

Star: Financial services are generally included in this part. A significant amount of income from SBU is seen in this part. An integration with the supply chain can be seen by GAP here. COnsumer demand for similar products can be helping in gaining a good business name in the market for GAP. A product development strategy can be followed as per SBU and innovative methods are predicted for the products and for business of GAP. In order to penetrate the market the distributors and the sales supply is required to be maintained properly in the business environment.

Cash cows: A significant amount in revenue can be seen to be growing by this cash cows method. Market share and market analysis is possible that can help in determining that business will grow or shrink in future. A recommendation can be drawn as to whether the strategic business can be profitable or not in this case. An innovative product in which the market share is around 25% is seen in this part easily. Good leadership marketing can be seen easily in this part. A strategic involvement suggests that they must invest in their research and development so that their business can grow with innovative ideas and methods (Mohajan, H., 2017). A category can help in turning the cash cow into a star. An increase in sales gap can be possible by this strategy involved. An international food strategic business can be helpful in the growth and high marketing share in their business. Investing enough on their business and operation can be helpful in the business of GAP.

Question Marks

The local business is kind of a question mark for GAP to gain a good business aspect. A high market growth rate is possible by the help of this local marketing and question marks strategy. A product developmental strategy must be followed according to this question marks strategy in GAP. This can help us determine the losses in future. The low sales is a reason for the less growth of the market and their business. This will help in operating the market and bring the business sales from the outlets. It can push the business and product to get a good marketing phase and conversion into Cash coe is possible in this case.

Dogs

The great environmental concern can be easily evaluated by the help of this Dogs methodology in GP inc. Minimizing the loss in business can be easily incorporated by these Dogs in BCG. This can ensure the profit for the business and investment strategy to be included in their business. Varios of the synthetic product and the clothing are declining due to new trends thus GAP also have to focus on new investment procedures for their business (Gassmann, 2017). The decrease of artificial products can be a helpful one for the business to gerow. The marketing aspect can be increasing in the countries if GAP could decrease their losses that they are facing in a few years.

Organization strategy

The suitability, accountability and feasibility is an important aspect in the strategic management of the GAP industry. The SAF framework is defined below:

Suitability

The development and incorporation of new markets can be beneficial for the business of the GAP industry here. The higher marketing can be penetrated by the help of their business strategy. These are possible because GAP has a good investment procedure on consumer research adn on the financial stages in their business (Zeng, Z. 2017). A diversification for the resources in business can be seen to be evaluated easily in the GAP industry. A budgeting for marketing and communication is seen here possible for the business aspect.

Acceptability

GAPs goal and mission is required to be incorporated in this part easily. The internal marketing and company's culture is also to be looked out thoroughly here. The financial and stakeholders risk are to be seen in this case easily. The investment can be seen to be enhancing in this case easily. The high risk acceptable to business can be evaluated easily in this aspect. A good return of investment is required to be seen in GAP business so that acceptability can be achieved here easily.

Feasibility

A suitable menu for high income groups is followed here properly so that business profit can be evaluated easily (J., van Merode, 2016). A premium menu for high class business establishments can be easily seen in the GAP industry. The consumer needs and behavior are required to be seen in this aspect easily for the business growth.

Conclusion

Thus it can be understood from the fact that the GAP industry requires certain methodologies to gain a good business aspect. Different business analysis is followed so that opportunity as well as threat to the existing business of GAP can be understood clearly. Organizational strategy is being preceded here with the help of SAF framework that is also beneficial one for the business of GAP. BCG is presented for the GAP industry so that their business orientation can be understood easily. For understanding GAP present business conditions the SWOT and Porter's analysis is preceded in this part.

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Recommendation

GAP has many outlets with branches that are established in different countries. They are required to meet the customers and customers' family requirements so that their business can enhance easily. The marketing and management strategy is required to be changed in GAP so that they can attract customers from the international market also.The potential threat to GAP is required to be understood so that they can grow in the business and can develop easily. Different opportunities are required to be looked throughout by GAP so that they can enhance their marketing aspect. Long term planning can be beneficial for the business to grow and develop in the global market easily. Three distribution channels are to be looked throughout properly. The customers and the stakeholders are to be looked out for properly so that business can grow easily. GAP must sacrifice their high prices and to sell their products in large volume; a lesser price is to be introduced to different products here.

Reference list

Journal

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