The GAP: PESTEL, SWOT and Porters Five Analysis

The perturbation PESTEL, SWOT and Porters Five compendiumElements of Analysis The GAP CasePESTEL AnalysisUtilizing the PESTEL (Political, Economic, Social, technical, Environmental Legal factors) model, the key drivers and argonas of evidential impact for the agonistical profit in the GAP case are (Johnson, Scholes Whittington 2005, pp. 65, 68)Political This seems wholly to be a factor with regards to operational differences amidst geographic/geopolitical regions, i.e., the US vs. the UK, and favorable welfare policies that affect authentic garment construction.Social This is a major driver of success as sort and style would potency fall chthonic this auspice. Specifically, the ability of the incorruptible to generate the perception that its crossways reflect the fleeting sense of a flair is central to being a be givener in retail fashion.Technological This is a significant factor as the lack of a fully function European e-commerce platform was an opportunity co st that can be measured in lost market share valued in the multi-million pound range.SWOT AnalysisStrengths The Gap has existed merchandising power and front line and has prime, established retail locations throughout the US and UK.Weaknesses The inability to establish e-commerce on the UK side has lost not only sales opportunities al mavin likely tarnished the image of a company that wants to be seen a hip and chic in a digital age in which competitive semblance is bricks and clicks.Opportunities Through existing resources and brand equity, the Gap has the opportunity to regain one(a) of the top spots in the mind of the consumer for fashionable clothing. One of the read/write head means of doing so is to quickly replicate the success of the online presence of the US disdain in the UK.Threats Perhaps the biggest threat is that one of the elflikeer dress shop venues go out achieve sufficient success to legitimately chip away(predicate) at the mindshare of the consumer t hat Gap currently has on a scale that forget be very difficult to reclaim.Porters 5 ForcesAs with the PESTEL mannequin above, only the most salient factors are indicated (Porter 1980, p. 4)Potential Entrants The spread out of small-scale boutique strongs allow profit-taking from firms that do not have the operating cost of a corporation much(prenominal) as The Gap. This allows for greater flexibility and hotfoot in the delivery of fashion to market.The Threat of Substitute Goods Similar to potential entrants, there are not only other products that perform the same function barely, in times in which economics dictate apportioning of scarce consumer resources amongst items that, to some extent, fall under the category of highly arbitrary spending. Contrary to this, one might argue that fashion will eternally be in style and thus in-demand, the attractiveness of the attention will attract more entrants. Eventually, a form of homeostasis will be achieved but only at the ex pense of the exit of some little economic firms.Industry Rivalry The combination of the above cardinal factors creates what is arguably a hypercompetitive environment characterized by larger firms essaying to sustain competitive advantage through enduring presence while small, waxy and fast firms look to take by chance a temporal portion by capitalizing on that which is most stylish.The Four Ps (Price, forward motion, Place Product)The concept of the marketing mix or the 4 Ps gives tremendous strategical insight into how the firm goes to market with its portfolio of goods and services.Price Pricey but not so much that they cannot be seen as luxurious necessities for those for whom being still or sexy is a real or aspirant lifestyle.Promotion Consistent with other aspects of the marketing mix, television advertisements feature hip and trendy music, often done by somewhat older ( nevertheless still cool) musicians with pleasing music. These featuring dancing or at lea st, rhythmic maneuvers, in which one must(prenominal) assume the clothes worn are as much a part of the causative agent for such behavior as the observable youthful attraction and attitude of the performance crew.Place Sold only through Gap stores in mainstream retail locations such as shop malls and through, at least in the US, Gap-branded online channels.Product Positioned as perhaps something that could be labeled as young sexy casual, such an offering virtually defines its market as those who are young and view (or want to view) themselves as fashionable and trendy. Products include shirts, jeans, sweaters, accessories and more and all geared at generating such a feel or experience for the wearer.Overall Business systemIn general, a firm can have one of two broad strategies cost-leadership or differentiation. With regards to differentiation, a firm may choose to plane section based upon the customer by focusing on a nook or specialty market or they may choose product dif ferentiation as by innovation or similar quest (Porter 1980, p. 35). Using this general approach, the Gap clearly pursues a strategy of pursuit competitive advantage by differentiating product offerings (what it does) to those for whom a sense of urban/sub-urban-esque fashionable personal style is very relevant to their lifestyle (the mug market) through a combination of exclusive retail locations and a corollary online venue (the where of its strategy).Corporate Social ResponsibilityThe idea of corporate social responsibility is scoop out expressed by the notion of, the extent to which an formation exceeds the minimum obligations to stakeholders as specified through regulation and corporate brass (Johnson, Scholes Whittington 2005, p. 191). With regards to the GAP case, such a perspective is evident when they actively seek to position themselves not simply as seeking to establish preserve competitive advantage but the advantages conferred to everyone through sustainable bu siness. Specifically, through their bail to support AIDS awareness and suffering, they achieve profits and good works. Antithetically, one critique would likely be to question not the outcome but the motive for doing so.The Resource-Based ViewThe essence of the resource-based view of the view establishes the lens of the VRIO framework. That is, for a firm to achieve sustained competitive advantage, its resources must be valuable, rare, inimitable and organizational in nature (Barney 2007, p. 138). With this in mind, it seems to follow that the best sources of such are resources which are intangible rather than tangible. From this perspective, the ability of GAP to attract and retain designers who can consistently replicate and market what is or is about to become fashionable at competitive costs would witness such criteria.Strategic RecommendationsThe essence of the Gap to maintain/re-establish sustainable competitive advantage is to be able to be both big and small simultaneously . The competition seemingly enjoys the element of first-mover advantage with regards to their ability to operate under the radar only to appear with trendy products in the market that slight insightful firms can then attempt to copy. Correspondingly, the ability of the boutique firm to mass-produce and distribute a successful product is far less than that of the Gap with it established manufacturers and well-oiled distribution channels. Thus, the Gap needs to adopt fast, flexible methods of getting fresh and accurate insights into production and into stores. In the classic business decision, the Gap has but two options make or buy. That is, they can both allocate resources in the form of time, talent or treasure (aka, money) to see these abilities or they may choose to outsource these functions to other firms. Perhaps a hybridized solution is to form strategic alliances with such smaller firms that have these resources in abundance but lack the marketing and manufacturing power o f the Gap. Such a solution would achieve the goal of the acquisition, even if temporary, that the Gap seems to lack as it seeks to create lasting sources of competitive advantage in the face of the hyper-competitive, good yet dynamically fickle industry of upscale casual fashion apparel.Mature vs. Dynamic FirmThe Gap competes in a arguably mature but changing and constanting re in the rawing industry. A mature industry can be characterized by the following (Barney 2007, p. 94)Slowing growth in total industry demand.The development of experienced repeat customers.A retardant in the increases in production capacity.A decrease in new product introductions.An increase in the level of international competition.An overall reducing in industry profitability.With these criteria, the retail fashion clothing industry is perhaps somewhat unique in that each year brings something of a second-chance to take over the market. Though the degree of competitiveness and production capacity indicate a mature industry, the new arrivals to the target customer segment in regards to age, grandness and attitudes provide a potentially rich new customer base.These factors lead to the classification of the industry as being mature but yet quite dynamic in the sense that technology and the preferred tastes of an dynamical consumer segment create a need for the Gap to acquire marketing insights and speed and flexibility in production to bring such high-margin, notional products as fashion clothing to market.Key ReferencesBarney, J. (2007). Creating and Sustaining Competitive Advantage, 3rd edition. fastness Saddle River, New Jersey Pearson Prentice-Hall.Johnson, G., K. Scholes, and R. Whittington. (2005). Exploring Corporate strategy, 7th edition. Harlow, England Prentice-Hall.Porter, M. (1980). Competitive Strategy Techniques for Analyzing Industries Competitors. Boston, Massachusetts The Free Press.