International Trade and Regulations

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InternationalTrade and Regulations

Gap Inc. is a fashion company that designs and markets clothing,accessories, and footwear for men, women, and children. Itsheadquarters are based in San Francisco, California. It was oncehighly profitable company, which operated in over fifty countriesworldwide. However, with the changing times and economy, it wasunable to maneuver effectively in the millennial-dominated market.Since 1998, it has it has been struggling with issues of fashionmiscues and losses.

Revenue and profits have been declining every fiscal year. Its annualreports used to be stunning, particularly those of the 1990s. Forinstance, in 1999 its sale had increased to $11.6 billion from $1.9billion in 1990 (Adams, 2016). In the same year, it opened otherstores in the United States. However, as the millennium turned,something horrible happened. The sales chart of the same-storedropped by 12%, 7%, and 5% in 2001, 2002, and 2005 respectively. Thislowered the merchandise margins. This resulted in the company closingits outlets by 15% from2002 to 2006 (Adams, 2015). In 2005, thesales in North America dropped from $5.7 billion to $5.4 billion. Inthe end, the earning at Gap Company slumped, and its stock becamestinker as the years moved on. The company’s analysts alsoacknowledged that they were unable to work out the economics (Adams,2016).

Furthermore, Gap Inc. faced challenges fitting in the fashion miscuesespecially between X and millennial generations, which arerepresented by about forty and eighty million people respectively.Initially, gap influenced people’s dressing. Since 1990, there havebeen dramatic changes in the fashion industry. People’s tastes inclothing and fashion changed with income and time. Initially, the Gapmade clothing that lacked interest and trend. Their main aim was tomake affordable clothes that were acceptable at work, in schools, orat leisure. They were so trendy such that celebrities endorsed them.This worked so well with generation X. However, in the newmillennium, the age group that purchased their products in thenineties stopped, and the company could not replicate its successwith the new generation. Moreover, many core customers of Gap startedto dress in fashionable clothes while others acquired better andexpensive tastes. According to Wieden and Kennedy’s New YorkOffice, wearing regular does not make a dent (Adams, 2016).Furthermore, the company had lost its brand identity. Earlier, itsselves had different kinds of clothing ranging from classic casual toprofessional wear to trendy leaving the consumer to wonder about thename. In the past years, Gap was a good example of other brands.

For it to arise again, Gap needs to investigate the trend market, aswell as keep in mind that fashion change daily. They should resurrecttheir innovation spirit and adopt various strategies. It shouldreduce design to sale cycle, strengthen customer loyalty, expand itsonline cataloging, identify and penetrate consistent target segments,enhance the identity of individual brands, and combat competition inthe market.

To deal with the fashion issues, Gap should introduce new productsand designs of all types and for all age groups from children toadults that are more appealing to the consumers. This way, they willgain popularity with the customers. They should focus on productdifferentiation since some consumers confuse Old Navy and Gapproducts. Additionally, it should expand its online cataloging. For along time, the company has been focusing on physical sales ratherthan online stores. With its present position, it should increaseonline sales since it spends more in online marketing compared to itscompetitors. Although its stores are located all over the world, itdoes not have diversity since most of them are in centralized in theUnited States. According to Adams (2016), Gap Inc can increase itsmarket share if it can utilize the latest technology. This will maketheir production more efficient and effective hence, can easily takea competitive advantage to overcome competitors in the market.

They should strengthen customer loyalty and their reputation byproducing high-quality products. They should have direct with theirclients so that they can acquire valuable insights into theirpreferences. Besides, it should make a franchise agreement with othercountries such as Singapore, Malaysia, Saudi Arabia, Philippines,Bahrain, among others. Hendriksz (2015) argues that having a goodmarket reputation and maintaining it, the company will acquire moremarket shares if they introduce a new product. In other words, theyshould also establish product development strategy in order tocompete with their competitors.

Finally, they should get a celeb to endorse their product, whichmight boost their sales. The person should be famous among all agegroups. He or she might be a famed actor, actress, or sportsperson.They should also sponsor big events such as football tournaments aspart of an advertisement. In the meantime, they will gain consumersattention, which is likely to bring changes in the sales for sometime.

Indeed, Gap Inc. has undergone many difficulties to reach itsobjectives. For years, it provided a large variety of stylish,fashionable, casual, and reasonably priced attire that attracted manyconsumers. Nonetheless, it is competitive financially, butunfortunately it is losing sales to smaller brands. It is notperforming well, which has led to the net sales decline. For thisreasons, it needs to improve certain aspects to regain itsreputation.


Adams, E. (2016, April 08). Has Gap Finally Figured Out What ItsCustomers Want? Retrieved March 23, 2017, from

Hendriksz, V. (2015, December 04). Can Gap bounce back after becomingfashion`s `basic` brand? Retrieved March 23, 2017, from