Question

1. What are the strategically relevant components of the U.S. Retail, Family Clothing Stores Industry Macro environment?

Answer 1

Market Size and Growth- Estimated revenues were over $100 billion among competitors in this industry, yet annual growth for the industry was below 2%. Also the evolution of technology has caused for a more mature market increasing the need for an online market. This poses a threat to GAP because at the time GAP had very weak e-commerce strategies.

Segmentation-Both women and younger consumers compose the largest segments of the , which may be linked to the trends supporting competitors utilizing a fast fashion-style of competition, while potentially limiting those retailers whom are more family oriented, and not focused on fashion and trends.

Scope of rivalry- Rivalry in the industry can be considered global.Trends and brand names drive rivalry as competitors compete in both brick-and-mortar and e-commerce.

Decline in popularity of malls- The decline in mall foot traffic is another factor as to why GAP is struggling in this economy. Given both the rise of technology, the comfort and ease of shopping online, as well as the changing trends among younger demographics in regards to free time and in-person or virtual socializing, GAP has suffered.