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Strategic Team Four

Strategic Team Four. BMGT 495- Strategic Management Doctor vernon swinton 4 may, 2014 Christian Snuggs (Team Captain) Disheka Butler Rachel Kenlon Clemente Moreno Matthew Ulichney. Agenda. Alternative Strategy Generation SWOT Analysis Strategy & Prioritization Selection Action Plan

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Strategic Team Four

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  1. Strategic Team Four BMGT 495- Strategic Management Doctor vernon swinton 4 may, 2014 Christian Snuggs (Team Captain) Disheka Butler Rachel Kenlon Clemente Moreno Matthew Ulichney

  2. Agenda • Alternative Strategy Generation • SWOT Analysis • Strategy & Prioritization Selection • Action Plan • Evaluative Plan 1st HALF (8:00-0900) 2ND HALF (9:15–10:15) • Vision and Mission • Background Organization • Industry Analysis • Competitive Analysis • Financial Analysis • Technique Analysis

  3. Vision and Mission • Current Vision & Mission Statement = NONEXISTENT • Proposed Vision Statement: “World’s leader in Casual, Classical, and Stylish apparel… at accessible prices” • Proposed Mission Statement: “Provide exceptional services and clothing apparel to customers as well as providing a responsible ethical work environment for employees” References: (David, 2013, pp. C-55)

  4. Background Organization • 1970s – 1980s: • First public offering 1.2 million shares • Focused on private label • Purchased Banana Republic • Introduced GapKids • Opened stores in England and Canada • Sales reaching $1billion • 1990s: • Opened stores in France, Tokyo • Introduced Old Navy • 2000s: • Purchased PiperLime and Athleta Inc. • Opened stores in China and Italy • Currently: • Stores in 24 countries • 3,500 stores • 136,000 employees • Six brand names • 1969 – Doris and Dan Fisher opened first Gap References: (David, 2013, pp. 54-65); (Gap, 2014)

  5. Industry Analysis • Economic Forces • Disposable Income • Unemployment Trends • Political, Governmental, and Legal Forces • World Oil, Currency, and Labor Markets • Technological Forces • Communication • Marketing • Competitive Forces • Social, Cultural, Demographic and Environmental Forces • Population Changes by Race, Age, Sex, and Level of Affluence. References: (David, 2013, pp. 54-65); (Gap, 2014); (Bureau of Labor Statistics, 2014)

  6. Industry Analysis (Cont’d) References: (FRED, 2014)

  7. Competitive Analysis • Competitive Forces • Key Questions • Knowing Your Competitors • The TJX, Companies, Inc. • American Eagle Outfitters, Inc. • Abercrombie & Fitch Co. • Nordstrom Inc. • Porter’s 5 Forces • Rivalry among competing firms • Potential entry of new competitors • Potential development of substitute products • Bargaining power of suppliers • Bargaining power of consumers References: (David, 2013); (Yahoo Finance e, 2014); (Yahoo Finance f, 2014)

  8. Competitive Analysis (Cont’d) References: (Gap, 2014); (Yahoo Finance a, 2014); (Yahoo Finance b, 2014); (Yahoo Finance c, 2014), (Yahoo Finance d, 2014); (Yahoo Finance e, 2014); (Yahoo Finance f, 2014)

  9. Financial Analysis • Financial Statements • Financial Position • Profitability • Cash Position • Ratio Analysis • Liquidity Ratios • Leverage/Financial Ratios • Turnover/Activity Ratios • Profitability/Performance Ratios References: (David, 2013)

  10. Technique Analysis • Competitive Position • 2nd in revenues compared to competition • Global presences and expansion • Multiple business entities • Annual growth in sales .3% • Market Growth • Shift in consumer priorities • Opportunity to pursue age groups • Industry is growing References: (David, 2013, pp. 54-65); (Grannis, 2011)

  11. Technique Analysis (Cont’d) The Grand Strategy Matrix RAPID MARKET GROWTH • Quadrant I • Market development • Market penetration • Production development • Forward integration • Backward integration • Horizontal integration • Related diversification • Quadrant II • Market development • Market penetration • Production development • Horizontal integration • Divestiture • Liquidation STRONG COMPETITIVE POSITION WEAK COMPETITIVE POSITION GAP • Quadrant III • Retrenchment • Related diversification • Unrelated diversification • Divestiture • Liquidation • Quadrant IV • Related diversification • Unrelated diversification • Joint ventures SLOW MARKET GROWTH References: (David, 2013, pp. 54-65); (Horizontal, 2014)

  12. Alternative Strategy Generation • Steps toward Alternative Strategy Development • 1. Identify potential disruptive events • 2. Spot Strategic trigger points • 3. Evaluate possible effects of potential disruptive events • 4. Create Alternate Strategy • 5. Evaluate counter action(s) of alternate strategy • 6. Establish warning signs • 7. Develop/Establish implementation “time-phase indicator(s)” References: (David, 2013)

  13. Alternative Strategy Generation (Cont’d) • Potential Disruptive Events to consider • Major Competitor change • Dramatic changes in Sales/Profits • Supply/Demand changes • Disaster/Crisis/Opportunity occurrence References: (David, 2013)

  14. SWOT Analysis • Strengths: • Global Presence • Global Business Expansion • Internet / On-line websites • Multiple Business Entities • “Casual, American Style, Classical Apparel at accessible prices” • Weaknesses: • Unclear Current Vision/Mission Statement • Focused mainly upon “private-label” merchandise only • Complete lack of Contingency plans and planning References: (David, 2013); (Gap, 2014), (Kotler, 2012)

  15. SWOT Analysis (Cont’d) • Opportunities: • Pursue 15-19 age group • Remember “Baby Boomer” age group • Enhance On-line websites • “Green” Production Operations • Threats: • Global Economy • Competition / Competitors • Rising prices of resources, materials, transportation • Retaining Key employees • Security of data • Unexpected disasters / events • “What-If” sales fall References: (David, 2013); (Gap, 2014), (Kotler, 2012)

  16. Strategy & Prioritization Selection • #1: Employment of Technology • #2: Product Differentiation • #3: Expansion • #4: Strategic Distribution • #5: People Differentiation References: (David, 2013); (Gap, 2014), (Kotler, 2012)

  17. Action Plan • Implement ST4’s proposed Vision-Mission statement • Consider/Remember Gap’s historic background: • “Continue Gap’s Legacy!”, “Build upon it!” • Conduct/Continue Competitive, Financial, & Technique Analysis • Generate/Possess Alternative Strategies • Capture/Address current industry events • Establish Contingency Plans • SWOT • Build upon Gap’s Strengths • Address/Correct Weaknesses (if able/if applicable) • Take Advantage of Opportunities • “Watch/Avoid” Threats • Employ/Engage Strategy Prioritization Selections

  18. Evaluation Plan • Review Bases of Strategy • Revise IFE (strengths/weaknesses) and EFE Matrix (opportunities/threats) • Compare to existing IFE and EFE Matrix • Measure Organizational Performance • Compare planned objectives to actual objectives • Forecast future trends • Take Corrective Actions • Reposition • Create formal mission and vision • Revaluate References: (David, 2013)

  19. QUESTIONS? Contact Information: Strategic Team 4 email box: www.ST4@BMGT495.com ST4: Providing Strategic Business Guidance since 2014

  20. References Bureau of Labor Statistics.(2014). CPS Tables. Retrieved April 25, 2014, from BLS.gov: Labor Force Statistics from the Current Population Survey David, F. (2013). Strategic Management Concepts and Cases: A Competitive Advantage Approach. (14th ed). New Jersey. Pearson Education Inc. FRED. (2014). Real Disposable Personal Income: Per capita. Retrieved April 26, 2014, from FRED Economic Data: http://research.stlouisfed.org/fred2/series/A229RX0/downloaddata Gap (2014). 2013 Annual Report. Retrieved from Gap Inc.com: http://www.gapinc.com/content/attachments/gapinc/GPS_AR12.pdf Grannis, K. (2011). NRF forecasts 4.0% increase in retail sales for 2011. Retrieved on April 29, 2014 from National Retail Federation. Website: https:///www.nrf.com/modules.php?name=News&op=viewlive&sp_id=1083 Horizontal Integration (2014). Retrieved on April 29, 2014 from Investopedia; http://www.investopedia.com/terms/h/horizontalintegration.asp Kotler, P., Armstrong, G. (2012). Principles of Marketing. (14th ed). New Jersey. Pearson Education Inc. Yahoo Finance a. (2014). The Gap Inc. (GPS). Retrieved April 27, 2014, from Yahoo Finance: http://finance.yahoo.com/q?s=GPS Yahoo Finance b. (2014). GPS Competitors. Retrieved April 26, 2014, from Yahoo Finance: http://finance.yahoo.com/q/co?s=GPS+Competitors Yahoo Finance c. (2014). The TJX Companies, Inc. (TJX). Retrieved April 26, 2014, from Yahoo Finance: http://finance.yahoo.com/q?s=TJX Yahoo Finance d. (2014). Nordstrom Inc. (JWN). Retrieved April 26, 2014, from Yahoo Finance: http://finance.yahoo.com/q?s=JWN Yahoo Finance e. (2014). Abercrombie & Fitch Co. (ANF). Retrieved April 26, 2014, from Yahoo Finance: http://finance.yahoo.com/q?s=ANF Yahoo Finance f. (2014). American Eagle Outfitters. (AEO). Retrieved April 26, 2014, from Yahoo Finance: http://finance.yahoo.com/q?s=AEO

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