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Gap Case Study- Analysis current strategy - Essay Example

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Gap Case Study- Analysis current strategy

45). The demographic trend include factors like the number of target consumers, age mix, distribution of people across target geographical areas, population composition by ethnicity and trends in income within target market. These factors have significantly remained constant for the industry, except income distribution that could have been caused by the economic recession in the year 2009. The industry’s target market that defines its geographical environment is also global due to regional and international trade. Its economic environment is however variable and depends on factors such as interest rates, inflation rates and recession (Ireland, Hoskisson and Hitt, 2008; Thompson and Strickland, 2009). The industry is also significantly influenced by political factors that include legal systems and governmental agencies that protect consumer interests and include legislations and regulatory bodies and sociological and cultural factors such as general attitudes, health concerns, and cultural beliefs among the target market that significantly affect the industry and are particularly influenced by morality, taste, and preferences. Industrial operations’ dependence on technology for production and marketing also identifies technological trend as a factor to the family clothing industry’s environment besides globalization that facilitates international competition (Ireland, Hoskisson and Hitt, 2008). Porter’s analysis of the industry’s competitive forces The industry operates in a free competitive market. Its competitive forces can be explored through the Porter’s approach of that identifies “threats of new entrants, bargaining power of suppliers, competitors, bargaining power of buyers and threats of substitute products or services” (Henry, 2008, p. 71). Threats to new entrants into the industry are weak because of the nature of the industry that includes established participants with consumers’ retention strategies. One of the factors that make it difficult for new entrants is the branding strategy that key players have adopted. With five major firms in control of the market and their established branding efforts, consumers have developed preferences and are reluctant to try products from new firms. As a result, inability to penetrate the market discourages potential new entrepreneurs and those that venture into the industry do not exert significant pressure on existing market players, especially the major players. The small profit margin factor in the industry that requires economies of scale for sufficient profitability is another factor that regulates potential new entrants into the industry, as small-scale ventures are largely unprofitable and new firms finds it difficult to command a large percentage of the market. Developed preferences through branding also ensures consumers strictness on supply chains or outlets from which they acquire brand commodities, as new channels and outlets are treated with suspicion. This preserves existing participants’ position in the industry (Thompson and Strickland, 2009; Henry, 2008). Buyers bargaining power is another factor in the Porter’s forces model. It defines the collective ability of a group of buyers or a single buyer to dictate relations with an enterprise in sales terms such as prices and other terms and ...Show more


Gap case study- Analysis of current strategy Abstract Business enterprises operate in competitive markets in which success depends on both internal and external environments. While the environmental factors are not easily controllable or non-controllable at all, in case they are external, appropriate management ensures organizational success…
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Gap Case Study- Analysis current strategy essay example
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