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THE GAP INCORPORATED

THE GAP INCORPORATED. Leann Bustamante Jeffrey Bertinetti Mary Cassidy. GAP. Gap Incorporated. Leading international specialty retailer Founded 1969 More than 3,800 stores worldwide May 19, 1976 initial public offering $18 per share Began trading on the NYSE 1976 Ticker symbol GPS

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THE GAP INCORPORATED

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  1. THE GAP INCORPORATED Leann Bustamante Jeffrey Bertinetti Mary Cassidy

  2. GAP

  3. Gap Incorporated • Leading international specialty retailer • Founded 1969 • More than 3,800 stores worldwide • May 19, 1976 initial public offering $18 per share • Began trading on the NYSE 1976 • Ticker symbol GPS • Also listed on the Pacific Exchange

  4. Clothing Accessories Underwear Loungewear Personal care items For women, men, children, and infants Under the Gap (GapKids, babyGap, GapBody) Banana Republic Old Navy Provides customers with:

  5. Why they lost market share: • Increasing competition in the retail industry • Not keeping up to date with current trends and fashion • Decreasing economy due to September 11th events

  6. Interview • 20 Gap Customers • 10 females, 10 males • How long have you been shopping at Gap? • Are you satisfied with the quality of Gap’s clothing? • Do you feel it’s consistent with the modern trends? • Do you feel it is adequately priced? • Have you noticed any decrease in overall satisfaction in the recent years?

  7. Results: • Customers of over 5 years • Decrease in overall satisfaction • Prices increased • No quality increase • Have stayed with modern trends • But competitors doing a better job

  8. THE GAP INCORPORATED • AHP ANALYSIS

  9. AHP Analysis • Strategy A: Marketing Brands • Strategy B: Design and Merchandise Products • Strategy C: Shopping Environment

  10. AHP Analysis • Three criterion: • Cost Control • Quality • Service

  11. AHP Analysis

  12. AHP Analysis

  13. THE GAP INCORPORATED Future Sales Predictions

  14. Quarterly Sales(Observe Seasonality)

  15. Gap Inc. Annual Sales(1991-2000)

  16. Linear Regression • A linear model can be used because the data shows a clear trend • High R Squared variable shows strong relationship between annual sales and year

  17. Linear Regression Analysis • Y = -333.44 + 1206.95X • Predicted Sales(all sales in millions) • 2001 = $12943.02 • 2002 = $14149.97 • 2003 = $15356.92

  18. MATERIALS REQUIREMENTS PLANNING

  19. New MRP • SAFETY STOCK • 20% of sales should be kept on reserve for unexpected situations • LEAD TIME • Should be shortened to get them to customers when needed • IMPROVES CUSTOMER SATISFACTION!!

  20. NEW MRP • Lot-Sizing-Rule • Minimum Order Size • Lowest amount of inventory possible means NO EXTRA COST!

  21. TOTAL QUALITY MANAGEMENT

  22. CODE OF VENDOR CONDUCT • Clearly laid out set of rules which must be followed • Enforcers of the Code: Vendor Compliance Officers (VCO’s) • Inspect sewing machines for safety guards • Review Payroll Records • Interview Employees

  23. PROBLEMS WITH GAP INC.’S TQM • Workers see the VCO’s as “watchdogs” • Workers may hide mistakes • Workers may pass blame onto their peers • LEADS TO TOO MANY CONFLICTS!!

  24. THE NEW TQM • Incorporate Deming’s 14 point program • Break down barriers between departments • Eliminate numerical goals/quotas • Remove barriers that hinder the hourly worker • This Leads to More FREEDOM!!

  25. THE NEW TQM • Quality Circles • Groups of workers meet regularly/share information about the company • House of Quality • Finds out the attributes that a customer likes • Benchmarking • Compares Gap Inc.’s products with the competitors (J. Crew, Abercrombie)

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