Gap, Inc. Retailing Analysis - Essay Example

Gap’s trouble in 2001 At the time of Millard Drexter, there were 200 underperforming stores of Gap Incorporated that continuously operate. This specifically decreases the level of profit generation considering that the entire operation of the company continues in a regular manner while generation of revenue came into a downward spiral. Unfortunately, financially speaking Gap Incorporated could not eventually continue to operate in this condition. This is an issue of lack of management perspective and outlook.

The company lacks appropriate evaluation system in order to identify its weakest and strongest areas. Unfortunately, this continues to operate and in 2001, the financial performance of Gap Incorporated received substantially small net margin for income. Compared this with the performance of other retailing companies, Gap is far behind and the whole opportunity is lost for the good of its competitors. There is another important view that Gap Incorporated under the management of Drexter was overlooked.

There was lack of market research that could determine customers’ preferences and needs. This eventually is the reason why Gap Incorporated misjudged fashion trends in 2000. It tried to create trendy apparel for young adults but it was not creating greater impact in the market. Customers were ending up choosing other fashion options due to some important reasons including their own style. For instance, it is important to know that American consumers spend less on clothing due to the fact that fashion does nowadays does not only include clothes but other accessories and technological gadgets.

For instance, iPods and iPhones are considered part of the fashion trends among American consumers. Normally, niche markets for growth opportunities are the most significant view in apparel retailing industry. However, the market is continuously expanding and there are added segments that need to be clearly understood further. In the United States, size fittings among Americans change over 60 years. In line with this, more data are necessary to be gathered in order to find out the best fittings for Americans.

Apparel industry is also competing with vacation, housing and automobile industries. These industries at some point minimize the level of revenue intended for Apparel industry. Thus, with the consumer and market research, Gap Incorporated for instance will be able to identify the right move in order to stimulate needs for its product offerings at the right timing. There is also another important marketing trend that needs to be understood by Gap Incorporated. This is in line with the declining significance of department stores in the US apparel industry.

This is how important marketing research is. It tries to help retailers understand consumer behavior and the entire market in general. Understanding consumer behavior means knowing exactly what they prefer over the other offerings available for them. Gap’s spectacular turnaround in 2003 Gap was able to remarkably have itself applauded for its honesty with respect to improving the working conditions for the manufacturer of its garments in factories. This created a certain level of trust that promotes more than just a promising output.

This remarkably opened up the possibility of increasing customer relationship and to ensure trust and loyalty in the end. Not only that, Paul S.