The Handbook on Management Theories - Case Study Example

Gap Inc. Enterprises The general background of the venture and its entrepreneurs 1 When and how the venture began Don Fisher and his wife transformed their single store they founded in 1969 in San Francisco into renowned Gap Inc. The store began as a simple retail business that stocked tapes and Levi’s records (Don, 2009:6). The invention that Don brought into the retail market has earned him praises allover the world. Don had envisioned a casual wear store, which could stock products for people living in the city. He believed that he could do the business his own way creating a unique entry into a market flooded with casual wear stores. 1.2 The Entrepreneur Gap Inc. is an organization whose brainchild id Don Fisher and his Doris. The business started as a small family business in San Francisco where he lived with his family. Don came from a middle class family, which had settled in a two-storey house in San Francisco. Don had great vision from early stages in life. He could recall great constructions in United States such as Golden Gate Bridge, which sparked his life to create a difference in a lifetime. His personal life includes spending time in the beach as a way of enjoying his weekend. Don attended UC Berkeley University where he studied business administration degree (Don, 2009:12). Don recalls that his business ideas came from his early days in the University where his, which he attest did not cut across his mind. Don worked as US Naval reserve and participated in making decisions for his father in business meetings. He married Doris who altered his life to become a renowned entrepreneur a cross the globe. 1.3 Opportunity for the venture Don had the idea that business could not just pay his bills but would also excite him. He took some time to achieve this ambition. Don asserts that without bad lack Gap Inc. would not be in history. Don who had been in business with his father, branched out to initiate his own business in mid 1960s. Don used the first opportunity that came his way when he bought Capitol Park hotel. He refurbished the building and leased some of its space to Levi’s sales representative. Levi’s sales person took the opportunity to open a showroom within the building. Don mentioned that he enjoyed the arena created by the showroom in the building. Opportunity for the business venture came when Don could not find the right pant size. He had bought pants that could not match their needs. Don recalled that Doris and him walked through the streets of San Francisco and failed to get the right sizes. Then the idea came what if someone stocked all sizes. 1.4. The motivation to found the venture Don motivation was Levi’s showroom in his capital park hotel building that he had bought. Don and Doris figured the situation around the city and felt that it was a good idea to create their own retail store that would cater for age 12 to 25. The urge to change the underlying situation motivated their idea of business. Don had stated that he had little idea about retail business but that could not let his views collapse in one drop. Don noted that he did not have a similar competitor in San Francisco bay that had similar products. Business personalities are keen to evaluate factors that would make their business thrive. 1.5. Exploitation of the venture and acquisition of resource Don thought of the name of his new venture and settled to name Pants and Discs. His wife Doris changed the name by giving the business opportunity the name Gap. Don conducted a market research before a writing a business plan about the intended store. He noted in his market research that the location of the Capital Park building would address the needs of customers age 12 to 25. The location had adequate parking. He outlined that his success would depend on right employees and adequate stock. He could not afford to ignore the influence of stock or capital for the business. Gap creation was to exploit the existing resources that Don acquired. Resource acquisition and management is a challenge to many businesspersons, but Don and Doris did not really face this challenge (Danziger, 2002:181). 2. Strategies and results 2.1. Identifying the opportunity Identification of a business opportunity entails creating a unique venture into existence (Timbrell, et. al. 2005:123). Identification of a business opportunity determines whether an individual is an entrepreneur or a businessperson. Gap first business opportunity was to address the needs of the young age customers who had failed to get the quality of product their required for their age. Trends in the fashion business, which Gap venture is about has to respond to changes in market trends as well as study consumer behavior for its success (Lussier, 2011:231). Gap intending creates shopping experience for the clients that came to buy its product. Gap created dressing room so that it could address different demands of its customers. The interior had a display that sparked attention of the viewer. Clients who bought products from the first retail shop demonstrated that they loved what the experienced. In 1972, Gap made a remarked history by broadening its store name using Levi’s brand (Yorke, Schulz and Miller, 2011:12). The consumer behavior influenced Gap to think of starting other stores in other locations. Market share is a factor that influences expansion of a business (Danziger, 2002:156). Gap commanded a large market share that it could not serve using a single store. In 1973, Gap realized that it had to create other stores because of the overwhelming sales that it posted. 2.2. Marshalling resources Resource mobilization is a factor in entrepreneurship that influences the existence of a business enterprise. Gap started as a small business whose owners were Don and Doris. The ability of the business to rise to the standards that it has set depends on resource mobilization structure that the business developed. The first store of the business was a resource that Don bought from his own savings. Gap branches sprout because of its ability to command large market share and profits, which translated into its success. Initial intention of the business was to serve people in San Francisco bay. However, it emerged that the public demanded the business product and the owner could not let go the opportunity. Gap hired skilled personnel to bring value to the business. Business resources include human resource, assets, and goodwill (Mohrman and Shani, 2011:25). The business is currently boosting of over 134, 000 employees and over 30000 outlets across the globe. Managing these resources requires skills which Don and Doris could not do own their own. 2.3. Planning the new Venture Gap plans new business venture based on the consumer demand for its product. Initially, the business started by a single unit. The unit could not meet the growing demands in the market. Gap has responded to demands in the market by making ground plans for new locations that it intends to create its store (Yorke, Schulz, and Miller, 2011:6). The current plans of the business include franchise, which has enabled it to transcend into various location across the globe. The business has been able to open a company that manufactures clothing apparels for children women and men. Other staffs that the business manufactures include children playing staffs. Focus of the founder and the leadership of the business have influenced the plans that the business has been able to role in the market. For instance, the expansion plan of the business is board decision that business leadership makes after acquiring information about its progress (Robinson, 2005:98). Performance record of the business is a factor that influences the development strategies that the business adopts. 2.4. Starting the Venture Gap has been able to create new ventures through its constant growth. Starting a new business venture entails conducting a market research on how the business progresses (Sapru, 2006:123). The key factor that influence new venture of the business is the market share that the business is likely to command out of its new ventures. The business has been able to open new business ventures many locations across the world. Gap boosts of 3245 stores and franchise that the company commands in the world. The company has company owned stores in more than nine countries. Viability of Gap products in various locations has attracted stakeholders and other individuals to collaborate with business as franchise. In most occasions, Gap creates franchise business in locations, which the business does not intend to command large capital shares (Smith, et. al. 2011:6). 2.5 Managing the growth Gap registered a steady growth due to overwhelming clients it served in San Francisco. It decided to create other outlets which could serve clients needs (Gap Inc. 2009). Growth management of the business has influenced the business growth beyond United States. The business has been able to create international strategy, which influence the business entry behavior in the international market. (Olum, 2004:13) Global expansion strategy has been able to devise strategies, which influence business performance. The management of the business has been able to respond to its needs by creating factory outlets in various locations to avoid delay in product supply created through supply chain. 2.6 The Future The future of Gap is bright because it has achieved a potential growth in more than 40 years. The viability of the business in the future depends on its sound strategy to respond to dynamic markets trends. Franchise strategy of the business has enabled the business to create a large web in the international market, which responds to its global consumers (Miller and Herb, 2005:213). Leadership of the business has proved to be dynamic because the business has survived for many decades. Gap Management Motivation is a factor that influences entrepreneur’s ability to venture into a particular business. Gap motivated its owners through its performance in San Francisco and other outlets. Theory or motivation argues that motivation influence workers performance. The business has been able to motivate its employees. Decision-making is a management’s function, which influences growth of the business. Timely decision influence product supply, employee work out and general performance of the business in the market (Worley, et. al. 2010:12). The decision of the business to create its own brands such as banana republic, Old Navy among other brands influenced the business identity among the consumers of its products. Gap management constitutes of able leaders who discharge leadership roles to the business. Don had been the CEO of the company before leaving the position to qualified individuals to run the business. Business leadership enhances business performance through innovative approaches in handling business competitors (Smith, et. al. 2011:5). For instance, marketing department of the business conducts market research of the business product and influence product innovation and supply chain. The knowledge of the consumer trends is vital because it influences product supplied in a given market (Robinson, 2005:2). The business does not supply similar products in its outlets. The leadership of the business has been able to conduct market research has eventually influenced business locations. Gap SWOT analysis Strength of Gap include large network of business outlets (stores). The network has enabled the business to increase its activities. The large network creates competitive advantage to the business because most of its competitors have a few stores. The business has strong financial base, multiple brands, which enables the company to command a large market. Market share of the business would influence the income the business is able to attain (McDaniel and Gitman, 2008:145). Gap opportunities include emerging markets where it has not introduced its products. Franchise development of the company is another opportunity that the business can use to acquire more market share (Adetule, 2011:165). Weakness of Gap include low market share, which translate weak performance. Gap has concentrated its products in specific geographical locations because of the risks associated with shipping. It geographical concentration has influenced the firm’s vulnerability to highly competitive market. Market conditions in US limit the business opportunities to expand. Threats of the company include strong competition from business enterprises Mercy, Zara among others (Yorke, Schulz, and Miller, 2011:9). References Adetule, J. P. 2011. The Handbook on Management Theories. Indiana: AuthorHouse. Danziger, N. P. 2002. Why people buy things they don't need. New York: Paramount Market Publishing. Don Fisher. 2009. 1928-2009. Gap Inc. Founder. Available from http://www.gapinc.com/content/dam/gapincsite/documents/DonFisher_Bio.pdf. [Accessed on 10 April 2012]. Gap Inc. 2009. Gap Inc. Annual Report. Environment Sustainable Publishers: San Francisco. Lussier, N. R. 2011. Management Fundamentals: Concepts, Applications, Skill Development. New York: Cengege Learning. McDaniel, C. and Gitman, J. L. 2008. The Future of Business: The Essentials. New York: Cengege Learning. Miller, P. and Herb, K. 2005. What's Black about It?: Insights to Increase Your Share of A Changing African-American Market. New York: Paramount Market Publishing. Mohrman, A. S. and Shani , B. A. 2011. Organizing for Sustainability. London: Emerald Group Publishing. Olum. Y. 2004. MODERN MANAGEMENT THEORIES AND PRACTICES. Available from http://unpan1.un.org/intradoc/groups/public/documents/aapam/unpan025765.pdf [Accessed on 10 April 2012] Robinson, D. 2005. Thinkers for the 21st Century. Available from http://www.employment-studies.co.uk/pdflibrary/a_tj0305.pdf. [Accessed on 10 April 2012]. Sapru, K. R. 2006. Administrative Theories And Management Thought. New Delhi: PHI Learning Pvt. Ltd. Smith, C. N. et. al. 2011. How Gap Inc. Engaged with Stakeholders. Available from http://www.bsr.org/files/How_Gap_Engaged_with_stakeholders1.pdf [Accessed 10 April 2012] Timbrell, G. et.al. 2005. A STRUCTURATIONIST REVIEW OF KNOWLEDGE MANAGEMENT THEORIES. Available from http://eprints.qut.edu.au/10104/1/10104_2.pdf [Accessed on 10 April 2012]. Worley, G. C. et. al. 2010. Building a Collaboration Capability for Sustainability: How Gap Inc. is Creating and Leveraging a Strategic Asset. Available from http://www.usc.edu/dept-00/ceo/Worley_Feyerherm_and_Knudsen.pdf [Accessed on 10 April 2012] Yorke, R. Schulz and Miller, M. 2011. Krause Fund Research Spring 2011. Available from http://tippie.uiowa.edu/krause/spring2011/gps_sp11.pdf [Accessed on 10 April 2012] Read More