The Gap, Inc. or Gap is a US-based clothing and accessories store with outlets across the United States and 42 other nations (Gap, 2019). The headquarters of the company is in San Francisco, California. It was found by Donald and Doris Fisher in 1969. Gap operates six various brands under its name. It is the largest specialty retailer in the United States as well. The company has 3727 outlets. 2406 outlets are located in the United States (Gap-2, 2019). The company has acquired various other retail brands in the clothing industry to increase its market share. The Fisher family still owns a large part of the company stock and plays an important role in its management. In 2017, the company made revenue of $16.6 billion and had more than 140000 employees (Craft, 2019). The company continues to grow in terms of the number of stores.
Following are the four dimensions of the Ansoff Matrix for Gap:
Market Penetration
Market penetration is the act of promoting existing products in existing markets. The first strategy Gap uses in this regard is to aggressively market its products through print, social, and electronic media. It issues advertisements with prices of products on sales weekly. The company also employs celebrities as brand ambassadors to promote its products. It also motivates its existing customers to increase their purchasing by offering products in different colors and designs inspiring consumers to try various colors and designs and add them to their wardrobe. Various forms of discounts are also offered. Holiday and other sales are also common at Gap. The company uses various forms of augmented discounts and flash sales as well. The products are also improved based on consumer feedback. The store environment is also designed that it motivates consumers to spend more time and shop more while they are inside a Gap outlet. As a result, the company can successfully penetrate markets.
Market Development
This refers to the activity of launching existing products in new markets. The main market penetration strategy that Gap makes use of is expanding geographically into new regions. This can be done by establishing retail stores in new regions or allowing deliveries of purchases made online to those areas. This increases the number of consumers the company has and its revenues. However, there are financial costs involved. Another strategy that Gap uses is to launch product variants that are targeted at certain market segments. For example, low-cost replicas of premium designs are targeted at low-cost consumers by the company. Pricing variations are also used to create new market segments by the company. As a result, it can enter new markets, establish new market segments, and enhance its revenue.
Product Development
Product development is the activity of launching new products in existing markets. The first strategy that Gap uses for product development is to launch new products. These can include new product designs or new products being introduced for the first time. For example, a new t-shirt design or a new jacket style being introduced. Existing products are also improved in terms of design, quality, style, and so on. The company works quickly to be the first to bring the products to the market before competitors do so. Any product launched is immediately copied and sold at low-costs by replica brands. Consumer fashion and style requirements are studied in detail before any new design is created. This helps ensure that all new designs are successful. Each new product helps increase company sales.
Diversification
Gap has already diversified in various ways. Diversification is the launch of new products in new markets. Gap sells a variety of products at its outlets including clothes, apparel, and so on. It has the potential to further diversify through vertical integration by establishing its manufacturing units to create its products on its own. Another strategy can be to diversify into unrelated industries such as smartphones, consumer electronics, shoes, automotive, and so on. Related diversification can be in terms of sports, premium clothing, wedding dresses, and other industries. Each diversification holds a certain level of risk that needs to be assessed before any financial commitments are made by the company. Otherwise, the chances of losses exist.
References
Craft, 2019. Gap. [Online] Available at: https://craft.co/gap [Accessed 12 Jan. 2020].
Gap, 2019. Content. [Online] Available at: https://www.gapinc.com/content/gapinc/html.html [Accessed 12 Jan. 2020].
Gap-2, 2019. Store Count. [Online] Available at: https://web.archive.org/web/20100328133539/http://www.gapinc.com/public/Investors/inv_re_storecount.shtml [Accessed 12 Jan. 2020].