Gap Preliminary

Gap Preliminary - Many Suppliers (Developing Ctrys)...

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CLAIRE CHEN CASEY COX JEFF LAFLAM JOHN LILLY FEITONG LU TINKER TOY CHAMPS:
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Current Events Ø Industry Using Technology to increase productivity in attempt to reduce costs Falling Oil Futures combined with safer stock raising average stock prices Expects growth of Holiday sales to be approximately ½ the decade average U.S. Suppliers of Specialty Apparel Industry seeking continued protection from foreign producers Growing chain concepts for Specialty Apparel Industry compared to local retailers Ø GAP Expanding via Franchises to Mexico Struggling with product selection, “bloated store base”, High Executive Turnover Raised to Buy from Neutral by Goldman Sachs 2Q08 Sales down 6% verses previous year Globalization of Production is leading for a need to strictly monitor and improve Factory Conditions
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Industry Analysis Specialty Retail Apparel (125B) Industry Rivalry Suppliers Buyers Potential Entrants Substitutes Power of Suppliers (Lo) Ø  Apparel Producers, Foreign and Domestic    Cheap Labor abroad (hard for US)
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Unformatted text preview: Many Suppliers (Developing Ctrys) Standardized Product Threat of Entry (Lo) Brand Recognition Complicated Supply Chain Economies of Scale Extent of Rivalry (Hi) J Crew, A&E, A&F Many Competitors Slow Market Growth Low Switching Cost Power of Buyers(Moderate) Middle and Upper Class Standardized Product Price Sensitive Threat of Substitutes (Hi) High End, Discount Retailers, Department stores Increased Quality at Low Cost Differentiated product available Low Switching Cost Overall Assessment of Industry The Industry profitability is expected to be equal Economic Average The Industry actually achieves higher profitability then then Economic Average due to the importance of having Lo Power of Suppliers and only moderate power of buyers (ROE=15%)...
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This document was uploaded on 11/04/2011 for the course BUSI 698 at UNC.

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Gap Preliminary - Many Suppliers (Developing Ctrys)...

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