GAP Inc Strategic Design - Research Paper Example

GAP Inc – Strategic Design Introduction Strategic design is one of the most important part in any business or organization. There are three main reasons behind this. The first factor that helps us when we have a strategy is in understanding the company or the industry at large. Without this understanding we will not be able to identify the requirement of the business and hence the business will not be able to run properly. On a more practical approach, if we do not understand the strategy, how can recruit the suitable employees who will be working with us in the organization. The next factor that is important in strategic decision making is for the growth of the organization. Once we have an understanding of the internal goals of our organization, we can then go on to concentrate on the external environment and their requirements respectively. With the help of this analysis, strategists can then go on to design the future growth plans for the organizations (Berg, 2011). These plans are done with the careful analysis of the external environment such as the political scenario, economic condition, industry growth, etc. The last and the final factor is the most important one. It is the designing of the vision and goals of the company. Without a purpose, an organization will go hayware and will have no direction towards the growth. Thus, it is very important for a company to set its goals. The goals are decided based on the capabilities of the firm and based on that a direction for future growth is created. Now a strategy is essentially decided in three levels of the organization – corporate level, business level and the functional or the operational level. This report will discuss the three levels of strategy for the international apparel brand GAP Inc. Corporate Strategy Corporate level strategies are the decision that is being taken by the top executives at the highest level. They are essentially the Managing Director of the board of directors. Once the decisions have been taken, it is then circulated to the various departments of the organisation. Organization administrators have certainty about the long haul development capability of the brands and will reaffirm their aim to stretch through topographies and channels including claim to fame, on the web, outlet and franchise. The organization is affirming it hopes to begin to franchise Old Navy in 2014 in key worldwide markets. Furthermore, it will consider expanding upon its prosperity with Gap in China by investigating, including organization worked Old Navy and Banana Republic stores in this critical market. Murphy and organization pioneers are examining the chances to proceed with the development of its rising brands – Athleta, Piperlime and Intermix – in North America. GAP essentially plans to build on their product value and hence increase the sales so that they can generate the required revenues. They have a long term corporate strategy on expanding in the North American Regions. Since there has been a recent drop in the sales of apparel in physical stores, they have shifted their focus to building up an effective digital strategy and have started selling their products online. They have the additional advantage of being a multi-brand outlets with the acquisition of Banana Republic and Old Navy. They plan to utilise this opportunity to build up a strong platform and presence in the Apparel industry by delivering their services through online as well as physical stores in order to have an end to end system for better market presence. Business Strategy GAP Inc is an apparel brand and there it falls under the retail sector of business. So, they follow a proper retail strategy in order to sustain their business. With the increase in the worldwide combination and the availability of several options to the consumers, the sale in the GAP stores started falling. In order to regain back in the market, they shifted their focus and designed a different strategy to overcome their loss. The first step that they have taken is a huge expansion in the Asian region, which was earlier untapped, thus failing on the growings nations like India and China. The next prominent step for them was to acquire other small brands which were popular with the crowd, such as the Banana Republic and other online stores like the Piperlime and Athleta. So, their idea behind this is to buyout the market and have their brands so that people do not have the option to go to other stores (Hendricks, 2014). They have also closed down any of their stores and the percentage of shutdown has been noted to 21% because of their recurring losses. This was done to maximise their profit and concentrate more on their online retail stores and online shopping has given the physical stores a run for their money recently. This change in the business model is helping GAP because now that have a greater reach towards their consumers worldwide and anyone can buy their clothes online. Operational Strategy Since the 1990’s, GAP Inc has started focussing on their corporate social responsibility. Thus, they have started using a more human rights related approach towards their operational model. This practice has also been applied in their supply chain management. Being a retail sector, it is very important to keep their employees motivated because a retail organisation cannot run without a proper human resource. Thus, based on this ideology they have given priority to corporate social responsibility (GAP, 2014). This approach has also helped the organisation with their process of globalisation as it involves getting to know several different cultures and their diverse value. The CSR of the company has also been recognised by the prestigious non-profit organisation United Nations and they have also acknowledged their efforts. According to the organisation, these changes have given them progress where they have been able to go into several parts of the world like Pakistan, Bangladesh which are known to be sensitive because of their rigid values. However, GAP, due their CSR approach has effectively set up their factories in these countries so that they can start their production for the Asian market. With this change, they have gradually improved their overall position as an organisation and is slowly moving towards their predefined goals. References Berg, R. (2011). Three Reasons Strategy is Important. Bergconsulting.com.au. Retrieved 22 November 2014, from http://bergconsulting.com.au/Berg_Consulting_Blog/three_reasons_why_strategy_is_important GAP,. (2014). Operating context and strategy. Gapinc.com. Retrieved 22 November 2014, from http://www.gapinc.com/content/csr/html/human-rights/operating-context-and-strategy.html Hendricks, D. (2014). Gap's New Retail Approach and How It's Affecting Sales. Inc.com. Retrieved 22 November 2014, from http://www.inc.com/drew-hendricks/gap-s-new-retail-approach-and-how-it-s-affecting-sales.html Read More