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Gap - Environmental Strategy Analysis Gap Inc Danielle Fest...

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Environmental Strategy Analysis: Gap Inc. Danielle Fest Allison Turner ESM 210 Spring Quarter, 2002 Professor Magali Delmas Final Paper
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Gap Inc. (Gap) is a leading international specialty retailer offering clothing, accessories and personal care products for men, women, children and babies under the Gap, Banana Republic and Old Navy brand names. Gap operates more than 4,100 stores in the United States, the United Kingdom, Canada, France, Japan and Germany and employs nearly 165,000 employees worldwide. Over the past two years, however, the Gap has gone from one of the largest specialty retail chains in the US with $13.7 billion in annual sales, to a period of 24 consecutive months with sales declines and considerable stock depreciation. To respond to these recent difficulties, there are opportunities for the Gap to increase unit sales and rebuild the brand loyalty they once possessed. Gap’s corporate strategy has included major global expansion by increasing retail space, increasing its portfolio and expanding into diversified markets; in essence Gap’s goal is to become a “megabrand” like Coca-Cola or Nike. The Gap’s strategy also includes a formal environmental policy, which focuses on “empowering employees to shape environmental policies, improving production processes, building better stores and offices and reducing waste.” This paper will focus on the strengths and weaknesses of Gap’s corporate strategy for expansion and “megabrand” recognition. In addition we will examine the effectiveness of Gap’s environmental policy in terms of implementation and compliance. Finally, we make recommendations for ways that Gap can enhance its environmental policy to complement its business strategy. Background on Gap: Popularizing the Khaki Craze The Gap’s story begins in 1969, when a San Francisco real estate developer in search of a well-stocked, organized jean store decided to open his own. Donald G. Fisher, along with his wife Doris, named their jeans-only store the Gap, after "the generation gap," and concentrated on selling Levi's jeans. Drawing on a strong teenage customer base, the Gap continued rapid expansion throughout the 1970s, and began vending its own private-label clothing and accessories in 1974. In 1983, Millard “Mickey” Drexler was hired by the Fisher family and helped the Gap to make several profitable transitions. When he joined the Gap, it was “an undistinguished apparel chain” with sales over $480 million 1 . His vision was a forward- looking strategy, focusing on the emerging trend of “office casual” clothing. In 1983, the Gap continued its expansion by purchasing Banana Republic. The safari-theme had run its course and after the acquisition, Drexler boosted sales, still under the Banana Republic name, by offering higher-end clothing, including leather products, at higher prices. The company continued to grow rapidly in the 1980s and 90s with the further expansion of GapKids in 1985, BabyGap in 1990, and opening its first stores in Canada and the UK 2 . The Gap spun-off Old Navy Clothing Co. in 1993 and marketed the new chain as ultra-hip and low cost clothing.
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